Thursday, 19 January 2017

Bill change expected to further limit RTB

Housing associations are expecting further restrictions on tenant eligibility for Right to Buy, due to the government’s cutting of a levy to pay for discounts.

On Tuesday, parliament passed a Housing and Planning Bill amendment which aims to limit council funds flowing out of London to pay for the Right to Buy extension elsewhere.

Under the policy, councils will be forced to pay a levy based on a prior calculation of the value of their expensive, vacant housing stock. This week’s amendment means local authorities in London will be able to reduce this amount if they strike a deal with government to build two affordable homes for each home sold.

The Chartered Institute of Housing (CIH) has previously said around a third of the money raised from the council levy for Right to Buy discounts would have to come from London to pay for sales in areas of the country with little or no high-value council stock.

The restriction on the amount of money from London for the scheme means many are now expecting the Right to Buy – which the government has already said will be phased in gradually – to be implemented even more slowly, or with more exemptions.

John Perry, policy advisor at the CIH, said: “If there’s less money in the pot, the roll-out of Right to Buy will be even slower. The other option is to jack up the [council house] sales outside London.”

Dave Power, chief executive of One Manchester housing association, said: “The government will have to reduce the [Right to Buy] eligibility, or they could look at different ways of targeting the Right to Buy.”

The Conservative Party has previously estimated 15,000 empty high-value homes could be sold a year, raising £4.5bn annually. The National Housing Federation estimated the cost of the policy could reach £12bn.

In addition to compensation for Right to Buy discounts, levy cash is also expected to fund cheaper replacement council properties, contribute to a brownfield site fund and pay off historic debt.

Housing minister Brandon Lewis announced in November that the extension will be phased in to ensure it is affordable, and the scheme is already heavily restricted under five current pilots, with households only eligible if they have lived in social housing for 10 years.

The government has said the Right to Buy extension to housing association tenants will be “cost neutral” – meaning it will not put extra funding into the scheme.


  • The government has pledged to extend Right to Buy discounts to 1.3m housing association tenants
  • The funding is expected to come from a levy on councils based on an estimate of their empty ‘high-value stock’
  • The expectation is that councils will pay their levy in most cases by selling these ‘high-value’ homes
  • The levy in London will be cut if councils agree to build two replacement units for each home sold
  • The scheme will be phased in for housing association tenants, to ensure it is affordable
  • The government has ruled out putting extra public money into the scheme to make it work

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