Template sent to councils could tempt tenants to take on debt
Right to buy letter under fire for ‘irresponsibility’
The government has been accused of irresponsibility in its attempts to promote the right to buy policy.
The Communities and Local Government department has sent template letters to councils suggesting how they should promote the right to buy to tenants. The policy offers council tenants the right to buy their home with a discount of up to £75,000.
The letter from the CLG suggested councils flag up how much a right to buy mortgage could cost per week. It said: ‘Buy your home for £100 a week? So, if like your neighbours, you’re interested in the right to buy, don’t delay.’
Only on an accompanying fact sheet it did warn tenants about the risks of losing their home if they cannot pay the mortgage.
A senior source within the lending industry criticised the template and said it could be seen as irresponsible.
He said: ‘I wonder how people would react if it was a lender sending out these letters. They would be concerned that this would be overselling it.’
Councils told Inside Housing they would not be using the CLG’s suggested wording.
Ken Jones, director of housing strategy at Barking and Dagenham Council, said: ‘I’m not sure this letter is sufficiently measured. It is really important that when tenants are considering applying for the right to buy we give them a balanced position. The last thing we want to do is get people into future difficulty.’
Both Mr Jones and Ian Wingfield, cabinet member for housing at Southwark Council, said it is important that tenants are aware of service charges.
Mr Wingfield said Southwark will not use the template. He said: ‘We won’t be acting like an estate agent. We have to be responsible as a public body and point out to them that they need the financial wherewithal to buy their home.’
Hammersmith & Fulham Council, a flagship Conservative borough, has already sent its own letter to tenants, which unlike the CLG template, mentions that buying a home entails responsibilities.
A spokesperson for the authority said: ‘At each of our roadshows, we have had independent financial advisors on hand to discuss these responsibilities with tenants.’
Abigail Davies, assistant director of policy and practice at the Chartered Institute of Housing, said councils are ‘cautious’ about promoting the scheme as a disproportionately high number of homeowners to lose their homes were right to buy owners.
A spokesperson for the CLG denied it had acted irresponsibly. She said: ‘We are simply helping councils fulfil their legal duty to inform tenants of changes to the right to buy scheme.’