Saturday, 28 February 2015

Chancellor set to increase right to buy discounts

The Conservatives have won their battle with Liberal Democrat colleagues over the right to buy, with discounts set to be increased to £100,000 in London, according to reports.

Inside Housing reported last week that ministers from the two sides of the coalition government were locked in discussions over housing policy, with the Tories pushing for an increase in right to buy discounts.

The Evening Standard has now reported that discounts will be raised to £100,000 in the capital to reflect the high cost of property.

Other reports suggest chancellor George Osborne told cabinet colleagues they must cut their departmental budgets by £2.5 billion over the next two years, at a meeting this morning. The money is expected to be reinvested in capital projects, although it is not yet clear if housing will benefit.

The government relaunched the right to buy in March 2012, offering increased discounts of up to £75,000 and promising to ensure a new affordable home was built for every property sold. The latest figures on right to buy sales, published last month, show there were 3,495 sales in the first three quarters of 2012/13. This compares with 3,720 during the whole of 2011/12.

Conservative-led Hammersmith & Fulham said raising the discount to £100,000 would ensure the scheme would ‘truly take-off’.

Andrew Johnson, cabinet member for housing, said: ‘A £100,000 discount could make the difference to thousands of decent, hard-working Londoners who could not otherwise even dream of owning a home.

‘Now it’s the time for the chancellor to grab the right to buy bull by the horns and unleash a new generation of homeownership in the capital.’

A spokesperson for the Communities and Local Government department said they could not comment on specific policies ahead of the Budget, but that the department is committed to the principle of one for one replacement of homes sold through the right to buy.

Readers' comments (12)

  • Maria Judge

    Lord Neuberger's lastest legal ruling on leaseholders could put right to buy owners at Financial Risk

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  • Chris

    Isn't it odd how the Tory view of the 'pedigree' of a social tenant is so different when they are talking about the right-to-buy compared to when they are talking about the fundemental right-to-exist!

    Hypocritical young Old-Boys playing God with decent people's lives!

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  • BlokeWithAConscience

    That's hardly going to help the supply of social housing. Don't forget that with RTB one council or HA home is lost with a rent that tenants can afford whereas with the Schapps "affordable" replacement version (that might or might not be built one day) the affordable rent level is just below commercial rent level i.e. = unaffordable for most people.

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  • Never believe what the papers write – they most likely hacked someone’s email to get the information! As I remember there are and were rules on the right-to-buy, discount, ECT which meant no Tom Dick and Harry could say “want house, let me buy”. Which means either this chap and his wife had a massive family or did some deal with the ‘then’ current tenants or purchased them when they came onto the open market – strangely just like any other RP or buy to let property developer would do. Of-course, rich people now own half of them in London. Families of these who died would have sold on, got the cash, and the rich would be the only ones to afford them. A symptom of the greed of many, not just the few, who enjoyed large increases in properties values. The housing market, both rent and to buy, in this country is corrupted by years of political interference and no small tinkering will bring healing to the housing system.

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  • In what other walk of life would the Government bestow such a huge 'gift' of a valuable public asset to an individual? It's like telling somebody on free school meals "there you go - eat in that fine restaurant, all you like, somebody else will pay the bill". Daft. Damaging. Dumb.

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  • Chris

    The public utilities were one example David - sold cheap to 'the public' and now owned by, in some cases, foreign governments!

    The TSB is another example - and look who 'owns' it now and how much it cost!

    How about National Freight, Thomas Cook, British Airports - the list of items sold off cheap to 'the public' yet ending up driving the massive wealth of a few individuals are legion David. What is more astonishing is that it is not more widely discussed.

    How is it, for instance, that it was impossible for the British Government to afford to upgrade out water system, but somehow it is possible for us to pay the French Government to do so through their ownership of our water!

    Likewise, we could not afford to pay for the building of new power stations, but we can afford to pay a foreign power to do it for us, and of course pay the extra they need to make it worth their while.

    All the privatised state assets are costing us so much more, yet delivering so little improvement in proportion - because they have to fund the shareholders, of course.

    Now look at housing, Before being privatised under the Right-to-Buy - a rent that could be afforded by the low paid. After being sold on for private rent - a rent that can only be afforded with £billions of taxpayer funded housing beneifit - and this is supposidly better, more efficient, and more effective because the market will make it all right. Well, its clearly not all right, is it!

    And then, God help us, they put someone in charge who cannot even work out how to hang toilet paper without getting a servent to help!

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  • The tories said before the election that they would give a grant
    to council tenants to become home owners , to use those funds to give up their
    tenancy and to buy their own home outright, thereby releasing a useful
    empty home to assist those on the waiting lists.
    This scheme was to be called a foot on the ladder.....but what has
    happened to it since , has it been dropped.

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  • As I have said elsewhere both parties are at a complete loss how to deal with the collapse of the 30 year consensus that anyone normal will buy their property.

    When completely clueless how to proceed, we all fall back on the familiar. In the Conservatives case this is right to buy. How this can solve housing problems when most of them are in the private sector, and most council tenants as a result of their policies are now poor, is one for the "politically motivated".

    At the same time if you are one of the few council tenants in London and in lucrative employment, then of course you should grab £100,000 if the government offers it to you. For most of us the government doesn't offer 10p. Even if you think it is socially disastrous, who could resist a bribe of that size? I certainly couldn't.

    Still it has always been Conservative policy that huge gains for the few are paid for by small losses by the many.

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  • Joe Halewood

    So social housing is so scarce and so much in demand - the Tory bedroom tax rationale - that the Tories are upping the bung by 33% to get rid of this scarce resource!!

    And the story is Tories wanted this and Lib Dems didnt?

    Shameful state of affairs and especially if you want to lead with a political angle on the issue.

    THEN the massively increased prevous bungs (sorry discounts) that clearly haven't worked and Shapps and Cameron both said 100,000 new RTB sales if you recall have made hardly any impact - about 1000 up on last year and thus about 1% or so of what Shapps and Cameron predicted

    So - whats next when this fails too? A £200k bung (oh and of course more bashing of the feckless indolent workshy scrounging ASB scum that still live there and perhaps even larger bedroom tax cuts?)

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  • What is the rationale of increasing the RTB discount in face of a desperate shortage of affordable housing? Is it not the inevitable outcome that there will be even less social housing available?

    The level of discount suggests that replacing it would be costly and, therefore makes no sense.

    The history of RTB demonstrated various problems it caused such as disposing of social housing at a discount from public money to people who are well off and can afford it; many RTB tenants sold off their properties at a huge profit; many vulnerable tenants lost their homes buy being bullied into exercising the RTB by semi-fraudulent companies who funded it and got rid of the tenant for relatively little money. The main issue is still that selling off social housing at a price that makes it virtually impossible to replace it, is a very bad idea.

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