New housing should be permanently exempt from Right to Buy, says CIH

The government should exempt new homes from the Right to Buy permanently rather than for a time-limited period as the government has suggested, the Chartered Institute of Housing (CIH) has said.

The membership body, responding to the government’s consultation paper on reforms to help councils protect their housing stock, argued allowing homes to be sold would mean that supply grows more slowly, running counter to the government’s aims.

It said: “Given the urgent need for new social housing, it seems logical to exempt new homes and make this clear to tenants at the outset.

“Investment in new homes for social rent is expensive for both social landlords and for government, and the clear intention of the new government’s policy is to expand the supply of social rented homes (within the overall target of supplying 1.5 million homes in the next five years).”

The government in November published a package of proposed reforms to the Right to Buy policy, which allows tenants to buy their council homes at a discount.

As part of this, the Ministry for Housing, Communities and Local Government (MHCLG) has asked for views on exempting newly built homes from the policy - but has expressed a preference for this to be for a set period of, for instance 10 or 20 years after the home is built, rather than for homes built after a certain date.

MHCLG said at the time the latter would remove the ability of a tenant from ever being to exercise their statutory Right to Buy, while the homes would not rationally be defined as “new” after a given period.

Other key measures proposed by MHCLG (see box below) include increasing the three-year minimum tenancy period for tenants to be eligible, exempting homes improved through high level of council investment, increasing the period in which councils can ask for discount repayment and introducing a target for one-for-one replacements.

The CIH is arguing for a 10-year eligibility period and for exemption list to be updated , including protections for rural housing parishes below 3,000 population, and disqualification of specific types of properties in high demand and short supply. The CIH also said councils should have more control over use of receipts and replacement homes.

In its response to the consultation, the National Housing Federation also backed a 10-year eligibility period.

The housing association trade body said the maximum discount should be set at 5% and also supported an exemption in parishes with populations lower than 3,000 people.

It said it agrees with the general principle that the Right to Buy is not extended to those who already own a home or have previously benefitted from the scheme. However, it said should be some exceptions or discretion, such as for applicants who have previously owned a home but since experienced relationship breakdown.

Alistair Smyth, director of policy and research, at the NHF said: “Right to Buy reform is a welcome step to tackle the housing crisis, which is affecting people in every part of the country. We support the government’s ambition to build 1.5 million new homes, but we can only achieve this with the right support

The Local Government Association (LGA) in its submission called on ministers to go further and give councils more flexibility over how the scheme operates locally to “to best serve their local housing market and residents’ needs”.

This includes the power to set the discount rate and exempt properties in perpetuity. It said local authorities should be able to retain their Right to Buy receipts indefinitely to maximise the delivery of replacement homes.

Adam Hug, housing spokesperson at the LGA, said: “We are pleased with the steps the government has taken so far, but we urge further reform to ensure local authorities can properly manage the RTB scheme and address the chronic shortage of social housing.

“It is crucial that local authorities are given the power to shape the scheme to fit the needs of their communities.”

The Northern Housing Consortium also called for more flexibility and control over the scheme for councils.

Tracy Harrison, chief executive of NHC, said: “We’d like to see more control given to local authorities. They should be able to set discounts at a level which will allow them to replace homes or use alternative means to retain social housing, such as portable discounts. In areas facing the most acute housing shortages for certain types of homes, local leaders should be able to suspend the programme.

“There is not a ‘one size fits all’ answer. Local authorities are best placed to implement solutions which address the needs of their community.”

>>See also: Government predicts Right to Buy sales to drop to 1,700 a year as it tables legislation to slash discounts

The government has already introduced some changes to the Right to Buy. In November it reduced discounts to the levels they were before 2012, when the Conservative/Liberal Democrat coalition government increased them to revive the policy.