To receive a verbal update from the Head of Housing & Health on the Government’s ‘Right to Buy’ consultation.
Minutes:
The Head of Housing & Health provided the Group with a presentation outlining the key features of the Government’s consultation on the ‘Right to Buy’ scheme.
This included the following key information:
· Between 20 November 2024 and 15 January 2025 the Government undertook a consultation on further potential reforms to Right to Buy.
· The Ministry of Housing, Communities and Local Government (MHCLG) consultation sought views on how the Right to Buy (RTB) should be reformed so that it better protected the existing stock of social rented homes, provided better value for money for the taxpayer and ensured fairness within the system.
· The Government stated a desire to ensure that Council tenants who had lived in, and paid rent on, their social homes for many years could retain the opportunity to own their home.
· However, reform of Right to Buy was noted as essential to better protect much-needed social housing stock, boost Council capacity and build more social homes than were lost, supporting the Government’s commitment to deliver the biggest increase in social and affordable housebuilding in a generation.
· The consultation followed early Government changes in July 2024 which removed the several caps including the % cost of a replacement home that could now be funded using RTB receipts. Councils could also now combine RTB receipts with s106 affordable housing contributions for the first time – these flexibilities were in place until July 2026.
· In November 2024, RTB discounts to tenants also changed and were significantly reduced to pre-2012 levels. In the South West this discount was now reduced to £30k maximum (down from c£100k).
· The Government also increased protections on newly built social homes by increasing the cost floor protection period from 15 to 30 years. The cost floor limited the discount on Right to Buy properties to ensure that the purchase price of the property did not fall below what had been spent on building, buying, repairing or maintaining it over a certain period of time.
· As a member of the LGA/MHCLG Strategic Housing Group, the Head of Housing and Health was able to provide a professional response to the consultation which was summarized as follows:
o Eligibility – support an increase in the eligibility requirement (minimum 10 years, up to 15 years). Support limiting further gain from RTB if a tenant had benefited previously.
o Discounts as a percentage of the property value – support further reduction; as low as 1%, maximum 5%. In SW 1% would reduce maximum discount to £11k. Support consistency of approach across flats and houses and retention of regional caps with a further note on the challenges (additional cost) of delivering new build to meet local housing need in rural areas; especially around reduced economy of scale, plot sizes, material/module delivery, labour shortage and higher costs, relative impacts and working with communities.
o Exemptions – supported retention of existing exemptions. Asked Government to consider rural exemptions to support the retention and provision of affordable homes in rural areas. Emphasis on how this housing underpinned and helped to deliver sustainable rural communities. Also raised the disproportionate impact of RTB on the loss of social housing in rural areas and the challenges around new housing delivery in this context. Further consideration requested for exempting all new build in perpetuity going forward (versus current 30-year discount protections).
o Restrictions on properties after sale – supported an increase the discount repayment period (sliding scale based on when a RTB property was subsequently sold) from 5 years to 10 years.
o Requirements around the replacement of homes sold under the Right to Buy – did not support like for like/geographical restriction on replacement 1:4:1 homes based on receipt. Alternatively, further noted request for exemption on RTB sales for rural areas with wider flexibility on use of receipts retained to maximise delivery across area to ensure current housing needs were met which may have changed over time.
o Simplification of the receipts regime – supported proposed simplifications, further supported future retention of 100% of receipts and maximum overall flexibility to enable 1:4:1 monies to be used alongside all other grant funding (e.g. Homes England Affordable Homes Programme) as well as s106 to maximise delivery. Did not support any other restrictions on LAs – the Council needed maximum flexibility on capital spending. Welcomed recycling of unspent 1:4:1 regionally (potentially through combined authorities) rather than return to Homes England.
Discussion took place regarding:
· It was confirmed that the Cabinet Member for Housing, Assets & Property Services had been consulted prior to submitting the consultation response.
· The restrictions on properties after sale and the ‘sliding scale’ was already in place.
· Highly adapted properties would be exempt.
· Concern that in the past people often bought their own properties but then stayed in them continuing to be part of the community. There was evidence that this was happening less often and that community cohesion was suffering as a result.
· It was confirmed that a ‘secured tenancy’ started with the first property occupied by the tenant, they did not need to start again if they moved to a different Council property.
· It was expected that there would be a high number of applications once the scheme came fully into effect.
· The Head of Housing & Health confirmed that the Council would be asking for a further moratorium on RTB for any new builds since the pay-back period for new builds was between 40 – 50 years.
The Group thanked the officer for the update which was NOTED.
Note: Cllr A Glover declared a personal interest in that she was a Council tenant.