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New call to restrict private letting of Right To Buy properties

Apr 25, 2024

Original article from Landlord Today - New call to restrict private letting of Right To Buy ... (landlordtoday.co.uk)

A property industry group wants to restrict the private letting of properties bought in the future via the Right To Buy policy.

The Right to Buy gives council tenants the right to purchase the home they are currently renting from a local authority at a discount. Tenants are eligible to purchase after they have been a social tenant for three years, and the discounts go up for each year they are a tenant, to a maximum of 70% of the property value, capped at £96,000 (or £127,900 in London).   

Sales were highest during the 1980s, with over 1.4m homes sold between 1980 and 2000. In 1999 discounts were significantly reduced, and sale rates fell sharply after the 2008 financial crash. In 2012, a beefed up version of Right to Buy increased sales to where they are today, at up to 12,000 per year.   

Now an industry group - the Housing Forum - wants restrictions on how properties bought in the future via RTB can be let out.

It wants covenants should be placed on sales to either prevent the property from being let out, or alternatively to require them to be offered to the council to let, if they are not being used for owner-occupation.   

The Housing Forum also wants a series of other reforms, including discounts on a home to be no more than 20% of its value; the length of residency required to purchase to rise to at least five years; and exemption criteria to be modernised to include larger homes and those designed for specialist needs. 

The Housing Forum says there were three principal issues with Right to Buy.  

These were that the selling of council homes has increased in the past 10 years, with 113,000 homes sold in this time, and some councils losing as much as 10% of their stock. At the same time, the number of households in temporary accommodation has doubled to over 100,000; unfairness, with some tenants buying with gifts or loans from other family members only to sublet them on the private market; and RTB deterring councils from building new social housing, for fear it would be sold. 

Housing Forum director of policy and public affairs Anna Clarke says: “Our members across the housing sector work hard to increase the supply of affordable housing and know how badly this is needed. Forcing councils to sell off their housing at prices much lower than it costs to rebuild it leaves them fighting an uphill battle.  

“Many councils are keen to build new council homes – but they’re put off doing so by the risk of having to sell their new homes off as fast as they can build them. 

“We hope that the proposals set out here will provide some ideas for ways that the Right to Buy could be reformed to give councils the confidence to invest in new homes, as well as addressing some of the wider concerns around fairness.”: 

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