The Government’s controversial Proposed Housing Bill and the ‘Right to Buy’
The Government’s proposed Housing Bill will give approximately 1.3million Housing Association Tenants the ‘Right to Buy’ their home. The Bill seeks to extend home ownership which forms a key part of the new legislative agenda for the Conservative Government.
To fund this policy the Housing Bill will require Councils to sell their most valuable housing stock when it becomes vacant. Proceeds from the sale of these properties will be used to build new affordable homes in the same area and the surplus used to fund the ‘Right to Buy’ for Housing Association Tenants. Any remaining money is to be invested in a new Brownfield Regeneration Fund to increase the supply of new housing.
The Housing Bill contains further measures to deliver an extra 200,000 new homes through the new Starter Homes initiative, which will offer a 20% discount to first-time buyers under 40.
The Right to Buy scheme is widely associated with Margaret Thatcher’s era as Prime Minister. It was introduced in 1980 to give Council Tenants an opportunity to buy their rented home at a discount.
In research commissioned by Local Authorities in London, including Camden, Haringey, Islington and Enfield it was found that London Boroughs are expected to lose thousands of homes in the first five years of the Right to Buy (approximately 3,500 homes).
Councillor Sarah Hayward, leader of Camden Council said: “This research seems to support our belief that the Government simply doesn’t believe people on lower incomes should be able to live in London….This policy will change the social mix of London for ever, yet our economy relies on people of all income brackets being able to support the businesses here. Forcing councils to sell will kill off investment, stalling house building and mean that London’s communities will no longer be mixed and vibrant.”
A Local Authority’s ‘most valuable stock’ is in fact their 3/4 bedroom family homes for which there is the greatest demand. It is not yet clear how the rate of sale of eligible homes is going to be matched by the rate of new homes being built. If indeed it is not matched, then there will inevitably be a net reduction in available properties in the short term. Whilst the scheme will no doubt be welcomed by Housing Association tenants, critics say this is not a genuine solution to the wider housing crisis.
To obtain further information please contact Aisha Akhtar Solicitor in the Housing Management & Leasehold Services Team on 020 8799 1884