Saturday, 20 September 2014

CIH calls for rethink on right to buy

The Chartered Institute of Housing has called for a rethink of the government’s right to buy proposals ahead of an expected announcement on discount levels later this month.

Grainia Long, the CIH’s new chief executive, wrote to housing minister Grant Shapps, voicing fears that the expected £50,000 cap on discounts would lead to geographical inequality.

The Communities and Local Government department is expected to propose a discount of 60 per cent for houses and 70 per cent for flats.

The CIH has warned in low-value areas the discount could inhibit councils’ ability to fund housing, and in higher-value areas the cap would not increase demand.

Readers' comments (5)

  • Chris

    RTB should at the very least be suspended until such time that the levels of social housing stock are restored to the viable level of 5 million homes (the sort of quantity we would now have if the original stock had been replaced on a 141 basis and growth to meet need had been sustained)

    Until that point, aspiring home owners could still benefit from a transferrable discount with which to purchase in the currently stagnant private sector. This would then have the double win effect of preserving what the Minister calls a 'scarce social resource' whilst offering stimulus into the private market.

    RTB in the current circumstance is lunacy on top of failure.

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  • Tony Cook

    So, according to Chris, Grant Shapps views public housing as a 'scarce social resource'. Should that be qualified with: 'but not scarce enough'?

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  • Chris

    That is the contradiction of the Minister. He spouts 'scarce resource' when he talks about tenants earning a decent wage or underoccupying; but then he refuses to increase the supply and is using all measures within his power to transfer housing to the private sector and near market rents.

    Tony is so right to emphasise the hypocrisy of our current Housing Minister - but it must be noted it is a lesser hypocrisy than that of the Shadow Housing Minister who supports exactly the same stance of failing to make housing affordable and denegrating social tenure.

    The lack of opposition to the National Tory Party is not in the National Interest.

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  • Never mind high discounts meaning less ability to replace 1 for 1, the government aren't expecting that to happen. They point out that modern housebuilding is built on loans borrowed against the rental stream so you can sell with a discount and the bit that's left after paying off the debt and costs of sale and giving ceasar his due, leaves you £16,000 to build a new home, somewhere.
    Of course none have to be replaced until the ones planned to be sold before 2015 have been that's 12,700.
    If you read the RTB consultation worked example

    Example 1
    Actual sales 16 dwelling-houses
    Additional sales = Actual sales – projected sales = 16 – 10 = 6 additional sales
    Receipts = actual sales x receipts per dwelling-house = 16 x £50,000 = £800,000
    Less
    Attributable debt on additional sales = 6 x £17,000 = £102,000
    Transaction costs on all sales = 16 x £1,000 = £16,000
    Net receipts = £682,000
    The net receipt is sufficient to pay the full combined assumption:
    to Government = £420,000
    to the council = £170,000
    Balance available for replacement homes = £ 92,000

    So 16 properties sold and you have £92,000 to spedn on new ones ...

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  • Joe Halewood

    What?????

    The CIH has called for "a rethink of the government’s right to buy proposals ahead of an expected announcement on discount levels later this month"

    As those that have read the RTB2 consultation will know it has 6 options and 4 of these exceed a £50k maximum discount.

    However ahead of and during the consultation process Grant Shapps tweeted and retweeted regularly that the maximum discount will be £50k.

    Shapps has already ANNOUNCED the maximum discount at every turn and shows what regard he pays to consultation. It also shows that the consultation was a sham - Grant Shapps has already determined the outcome.

    Far from asking for a rethink on what the announcement will be, shouldnt the CIH be saying and exposing that the RTB2 comsultation is a sham

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