Right to buy to cover 30% of new home costs
The government has set out details of how it intends to ensure a new affordable home is built for every one sold through the revitalised right to buy.
The maximum discount level available has been raised to £75,000, but receipts will only meet 30 per cent of the cost of building a new home.
Councils will be able to retain these receipts if they sign an agreement with the government to use the money to build affordable homes in their area. Any money that is not used locally will be passed to the Homes and Communities Agency and Greater London Authority where it will reinvested in affordable housing.
The 30 per cent level mirrors the funding available through the government’s affordable homes programme, where developers are expected to attract the remainder of the funding through private investment, or putting in their own resources or land.
The government set out its plans for a revitalised right to buy last year. Many of the proposals – including rules on eligibility and discount rates – are unchanged, but the cap on the maximum discount has been raised from the £50,000 that was originally suggested.
Housing minister Grant Shapps 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 a new affordable homes, helping councils meet housing need and getting the nation building again.’