Property Lawyers
Senior Property Lawyer
Ministers overhaul Right to Buy in bid to arrest decline in take-up of scheme PDF Print E-mail
Tuesday, 13 March 2012 10:51

The Government has finalised an overhaul of the Right to Buy scheme which could see tenants benefit from discounts of up to £75,000.

The announcement was made on the same day as ministers launched the NewBuy Guarantee, a mortgage assistance scheme intended to help first time buyers.

Housing Minister Grant Shapps said the changes to the Right to Buy were designed to reverse a decline in sales from 84,000 less than ten years ago to just 3,700 last year.

Current Right to Buy discounts range from £16,000 in most parts of London to £38,000 in parts of the South East. The new £75,000 limit will – subject to Parliamentary approval – apply from April.

Shapps insisted that the new scheme would not lead to a reduction in the number of affordable homes. Key elements include:

  • Councils will be able to reach a deal with the Government, allowing them to use the receipts from sales to build new affordable homes in their area;
  • The replacement of additional homes bought through the Right to Buy will be funded through the same model as the Affordable Homes programme. This allows social landlords to meet the costs of new homes “from borrowing against the future rental income, contributing from their own resources, including land, and grant funding from the Government”. Receipts will substitute for grant funding for up to 30% of total costs;
  • If receipts are not used locally, they will be handed to the Homes and Communities Agency and the Greater London Authority for re-investment in affordable housing;
  • Tenants will have to have been public sector tenants for five years or more before being eligible.

The Housing Minister said: "We're scrapping the miserly restrictions on the level of discounts under Right to Buy – great news for thousands of tenants who have done well for themselves and want to buy the home they live in.

"But we are determined to maintain the number of affordable homes for rent – so for the first time, homes that are sold will be replaced by new affordable homes, helping councils meet housing need and getting the nation building again."

Final details of the Right to Buy scheme can be viewed here.

According to Government estimates, the NewBuy Guarantee could meanwhile help up to 100,000 people buy their own homes.

The scheme, which is backed by three high street lenders and seven building companies, will offer mortgages on newly-built properties to people with just a 5% deposit.

The Government and the participating housebuilders will provide security for the loan, allowing the lender to recover its loss should the house be sold for less than the outstanding mortgage total.

The eligibility criteria include requirements that the price of the property must be valued at less than £500,000 and that the purchase must be a standard one (rather than shared equity or shared ownership).

Ministers claim the scheme will also support 50,000 jobs in construction and related industries by increasing demand.

Prime Minister David Cameron said: “We're re-booting the right to buy scheme to increase discounts for two million tenants in social housing in England. And we're delivering on our promise to offer affordable mortgages to buyers who might otherwise not be able to raise the money to buy a newly-built home.

"It's no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital.”

 

Latest News

April 15, 2014

Council, HCA and pension fund seal "first of its kind" housing investment fund

A contract for a housing investment fund – said to be the first of its kind – has been signed by Manchester City Council, the Greater Manchester Pension Fund and the Homes & Communities Agency. Read more
April 09, 2014

Battle between trail riders and council heads to Supreme Court

A dispute between a county council and a group of trail riders over the status of certain rural routes is to go all the way to the Supreme Court. Read more
April 01, 2014

London borough to use s. 106 agreements to tackle 'buy-to-leave' homes

A London borough is consulting on plans to use s. 106 agreements to tackle the issue of “buy-to-leave” homes. Read more
March 31, 2014

Campaigners net hearing over planning permission for QPR training ground

Campaigners seeking to challenge Ealing Council’s decision to grant Queen’s Park Rangers planning permission for the redevelopment of a sports ground and to give the club a 200-year lease have been granted an oral… Read more
March 27, 2014

Council fails in High Court appeal over house in multiple occupation ruling

The High Court has rejected a city council’s appeal over a ruling that a house in multiple occupation (HMO) in its area was not subject to the mandatory licensing scheme under the Housing Act 2004. Read more
March 25, 2014

Supreme Court set to hear latest in series of village green cases

The latest in a series of village green cases to reach the Supreme Court will be heard next week by a five-judge panel led by Lord Neuberger. Read more

 

Features

Planning 146x219
April 24, 2014

New permitted development rights in force

Polly Reynolds outlines the new permitted development rights introduced earlier this month. Read more
Construction iStock 000002149516XSmall 146x219
April 24, 2014

Borrowing powers, surplus land and affordable housing

The Government has given councils the opportunity to bid for more borrowing powers and also relaxed the constraints on them selling surplus land and property to developers for new affordable housing. Elizabeth Wood assesses whether this will really… Read more
April 24, 2014

Turbines, heritage assets and merits

Does a recent Court of Appeal ruling mark a change in the wind in relation to decision-makers and a key duty under the Listed Buildings Act 1990? Gordon Nardell QC and Justine Thornton analyse the judgment. Read more
April 16, 2014

State aid, "preparatory works" and infrastructure projects

Does the European Commission's approval for a German infrastructure scheme involving grants to local authorities mark a shift away from the decision in the Leipzig Halle case? Alex Kynoch reports. Read more
April 02, 2014

Further chinks in the armour of town and village green status

Polly Reynolds analyses the likely impact of a key Supreme Court ruling on rectification of the register of town and village greens. Read more
March 27, 2014

Storeyville: houses in multiple occupation

The High Court has confirmed the scope of the licensing regime for houses in multiple occupation. Suzanne Ornsby QC and George Mackenzie explain why. Read more

 

Older news and features

March 05, 2014

The sound and the fury

February 20, 2014

Searching for an answer

December 18, 2013

Land ahoy

December 05, 2013

To permit or not to permit?

Click here for full section archive

Featured Jobs

Kent CC Property Lawyer


CLICK HERE to search all current vacancies

Featured Courses & Events

50% off LGLtv subscriptions

Sign up for Courses and Events Updates

* indicates required

Services v2

Yellow pages iStock 000009762383XSmall cropTo access details of individual advertisers, please click on the relevant banner below.

To search all entries in the Local Government Lawyer Services Directory, please click here

 

No 37 Park Square Chambers
Easton Bevins Chartered Surveyors
Professor Tony Monk Architectural Expert Witness

 


 Shout_to_the_top_looking_left_iStock_000006002590XSmall_98x74 Latest Blog Posts

 

 


 

Ballot_iStock_000006080605XSmall_thumb

Snap Judgement

Is the role of monitoring officer worth the risk?