Councils to be given greater flexibility in reforms to use of Right to Buy receipts

Councils in England are to be given more freedom on how they spend the money received from homes sold through Right to Buy, Housing Secretary Robert Jenrick has said.

The proposed new measures include: 

  • extending the time councils have to spend Right to Buy receipts from three years to five years;
  • an increased cap on the percentage cost of new homes councils can fund from Right to Buy receipts raised from 30% to 40% per home, “making it easier to build replacement homes”;
  • allowing receipts to be used for shared ownership, First Homes, as well as affordable and social housing;
  • introducing a cap on the use of Right to Buy receipts for acquisitions “to help drive new supply”.

The Government said the reforms, combined with the abolition of the borrowing cap in 2018, would give councils “substantially increased flexibilities to build the homes England needs”. 

The changes will take effect from 1 April 2021, with the exception of a new acquisition cap, which will be introduced from 1 April 2022, on a phased basis.

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Robert Jenrick said: “Councils have a crucial role to play in increasing housing supply, including building more affordable and social housing.

“I have listened to local authorities who responded to our consultation on the use of Right to Buy receipts and I am delighted to announce a package of reforms providing authorities with the flexibilities they need to develop ambitious build programmes and help get people on the housing ladder.”

Cllr James Jamieson, Local Government Association Chairman, said: “The LGA has long-called for reform to Right to Buy and we are pleased government has engaged with us and acted on councils’ concerns.

“Extending the time limit for spending RTB receipts and increasing the proportion of a new home that councils can fund using receipts will boost councils’ ability to build desperately-needed affordable housing for local communities.

“We now look forward to working with government to implement these reforms and it is good it will work through any specific local challenges some councils may face as a result of the acquisitions cap.” 

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