Right to buy boosted

I was delighted to see in the Budget book some measures to boost the right to buy.

There are three point:

• An increase cap in London, from 25 March 2013, in the maximum £75,000 to £100,000.
• The Government will simplify the Right to Buy application process for both local authorities and prospective tenants. It will "look at ways to simplify the application process to ensure applicants are not hampered by a burdensome administrative process."
• Eligibility: The Government will reduce the time tenants have to wait before they are eligible for Right to Buy from five to three years.

The Government says: 

The additional receipts from increased sales will be used to pay down housing debt and support the Government’s commitment to 1:1 replacement of all additional homes sold.

In boroughs such as mine there has been great enthusiasm for the right to buy but that has translated into a small number of sales. The £75,000 discount just hasn't been quite enough. The increase to £100,000 will be a great help. What would help even more would be a right to part buy.

Right to buy sales double - but are still too low

The good news is that right to buy sales have doubled. 3,495 sales have taken place since the discounts were boosted in April. There were over 2,000 sales in the three months from September to December which indicates sales are gathering pace as awareness grows, that figure is double the same period the previous year.

Those sales have generated £210 million in gross income which, under the reinvigorated Right to Buy, will be recycled back into new affordable homes for rent.

Some areas have seen particularly sharp increases:

• Dacorum - 34 sales since April 2012, compared to 10 in the 2011 to 2012 financial year (an increase of 240%).
• Welwyn Hatfield - 40 sales since April 2012, compared to 10 in the 2011 to 2012 financial year (an increase of 300%).
• Wandsworth - 28 sales since April 2012, compared to 2 in the 2011 to 2012 financial year (an increase of 1,300%)

We are reigniting the Right to Buy revolution

By Housing Minister Mark Prisk MP

There is no greater reward than a home of your own. People who've put everything in have every right to get something out. Aspiration is the bedrock of a free society.

No-one understood those values better than Margaret Thatcher. She once said: "To own your home is to do more for yourself and to do it the way you choose."

And the Lady, like our current Prime Minister, knew that those who take pride in their homes are the same people who take pride in their neighbourhoods and pride in their communities. They are the same strivers who will help push us irresistibly forward as a nation.

The Right to Buy revolution went on to secure more than a million people the keys to their first place. Many became the first generation in their family to become owner occupiers. They learnt that striving,
working hard, putting in the hours counted for something. They learnt ambition paid. And they didn't just pass their property onto their children but their aspiration.

Right to Buy helped create mixed communities, and gave people pride not just in their own home but also in their whole neighbourhood. And it allowed people to improve their home – such as installing a new front door – without having to get permission from some town hall official

Right to buy sales are sluggish so far - a right to part buy is needed

First the good news. There has been a huge increase in right to buy applications from council tenants since the higher discounts were introduced in April. A survey by Inside Housing of 25 councils found 5,697 households have registered.

The bad news is that only 233 of them have so far been converted to sales. In Birmingham, for example, there have been 696 registering their wish to buy, but only 65 who have actually done so.

Of course there is a lot of faffing about when it comes to buying a house at the best of times.  If you have the public sector involved in any transaction there will always be extra delay. There is also a lack of awareness among council tenants that the discounts have been increased to £75,000. The Government's publicity efforts thus far have been negligible. Labour councils, which have the most council tenants, will be the most resistant to processing the applications expeditiously - or letting their tenants know that the enhanced offer is available.

Labour attack right to buy as "fire-sale of community assets"

Yesterday the Prime Minister was in Wandsworth talking to council tenants who will have the chance to get on the housing ladder due to the restoration of proper discounts for the right to buy scheme.

What do Labour think of reviving right to buy? The Shadow Housing Minister Jack Dromey hasn't given a straight answer. Of course the fact it was the Labour Government that sabotaged right to buy by capping the discounts will not have gone unnoticed by those thousands of families whose dream of home ownership has been thwarted as a result.

But at least we have some clarity as to what Labour in local government think of the new offer. Cllr Tony Newman, is the Leader of the Labour opposition on Croydon Council. He is also the lead housing spokesman for the Local Government Association's Labour Group.

Right to buy discount tripled to £75,000 from next month

Confirmation this morning that the right to buy scheme is being strongly boosted from next month. The scheme had effectively been killed off - there were only 3,700 sales under it last year. The discount was capped at £16,000 in London and around £25,000 in most of the rest of the country. From next month it will be £75,000.

Proceeds will be used to finance new "affordable rent" properties.

More controversial is a New Buy scheme where the Government and house builder will guarantee mortgages where just 5% is paid in deposits.The scheme is for newly built properties worth under half a million pounds. It reduces the risk to the lender thus persuading them to provide 95% mortgage. If the purchaser falls being with their mortgage payments then the lender could still repossess the property and sell it. But their risk of doing so at a loss would be reduced by the indemnity.

Some are worried about this being similar to Bill Clinton's approach of pushing banks to give mortgages to those who couldn't afford them. I don't think it sounds as dangerous as that.

David Cameron says:

Right to Buy should be protected against re-selling for quick profit

John Moss, Conservative candidate for the City & East Assembly seat in next year’s London elections, highlights some protections which taxpayers need when the new Right-to-Buy offers are made.

One of the valid criticisms of the original Right-to-Buy policy was that it achieved little penetration of owner-occupiers in to inner city estates. Indeed, many homes which were bought on such estates were rapidly re-let by their new owners, often to those claiming Housing Benefit. As we embark on a new wave of Right-to-Buy, we must ensure that any homes bought at a discount are not immediately re-cycled back in to the lettings market and rented to people claiming Housing Benefit.

This is consistent with the “claw-back” provisions which were and presumably still will be included in any Right-to-Buy sales. These protected the taxpayer from buyers immediately re-selling their homes for a profit and cashing in on the discount given to them by the taxpayer. Similar protection against letting the properties needs to be included.

One simple way of protecting the taxpayer would be to set up a register of properties bought under Right-to-Buy which Local Authorities would be obliged to check before giving people Housing Benefit. If the property they hope to rent is on there, then no benefits would be payable. This restriction ought to be in place for a minimum of three years.

Pay to Stay – why did we ever do anything else?

John Moss, the Conservative candidate for the City & East London Assembly seat in May 2012, welcomes the recent housing announcements but calls for the right to buy for housing association tenants and more power to charge the rich higher rents

Grant Shapps had a good Conference. The announcement of the rejuvenation of Right to Buy was the pre-conference media splash and in the background of the week, he slipped out a couple of  golden nuggets which are finally getting traction, the idea of “Pay to Stay” and allowing councils and housing associations to deny people subsidised social homes if they already own another property.

It may seem bizarre that the current system of housing welfare actually allows the things which these two policies seek to correct. But it does. You can earn £145,000 a year (like Bob Crow, head of the RMT Union) or £66,500 a year, (like Frank Dobson MP) and still live in a council or housing association property on a social rent. It is also possible to secure a tenancy of a social home even if you own a property elsewhere. This is another example of the legacy of decades of policies driven by short-term political objectives, rather than sensible long-term policy goals.

So, what should those goals be? Do we want communities where people who need some help to meet the cost of their home, get that help if they only earn a small amount or lose their jobs? I think we do. Do we want communities where people with a variety of incomes live in the same streets, with no real distinction being drawn between them? I think we do. And do we want to stop people who earn high salaries from getting state benefits once their income rises to a level where they can meet their basic needs? I think we do.

Housing Association tenants should also get the right to buy

Mark Henderson is the Chief Executive of the social enterprise Home Group, one of the leading national providers of affordable and supported housing within the UK. He says the right to buy should apply to Housing Association tenants as well.

In the 1980s, the ‘Right to Buy’ gave the opportunity for millions of families to get onto the housing ladder and transformed housing estates by creating mixed communities. Thirty years on, ‘Right to Buy’ is once again at the forefront of the discussion around how we not only meet today’s housing need but also how we promote opportunity and greater social mobility.

Last year only 2,300 homes in England were sold under the scheme, down from the 2,870 sold the previous year. In fact, over the last decade figures recently released by Shelter’s new housing databank show that the number of ‘Right to Buy’ sales fell by 97% in less than a decade.

The announcement of a new phase with that critical ‘one for one’ commitment is very much to be welcomed. As a registered provider Home Group does recognize that there is a ‘Right to Acquire’ but given we have only sold 24 properties in the last five years it’s clear that it too is a policy desperately in need of reform.

If the government is committed to promoting aspiration and homeownership then why not extend the new phase of right to buy to housing associations?

There are after all strong parallels. Just as is the case with local authority stock, homes in the registered provider (RP) sector have been built with the assistance of grant. Although tenancies provided through RPs are not exactly the same as those provided to council tenants, many of the rights available to tenants in council housing apply in some form in the RP sector. Therefore there is a clear case for extending the Government’s revised right to buy policy to housing associations.

Use Right to Buy receipts for "deposit pool" to help more buy homes

Wandsworth Council has welcomed the boost to Right to Buy - but wants to use the money raised to help non council tenants buy a home as well. Right to Buy sales in the borough fell from 274 in 2003 to just seven last year due to the Labour Government's attack on home ownership by capping the discount to £16,000-£38,000.

Wandsworth wants the ability to set the level of discount and the freedom to use receipts to create a 'deposit pool' to help others into home ownership. Under the scheme a deposit of up to £50,000 would be offered to first time buyers with money being repaid into the pool once the property is eventually sold. The Council also wants to see private developers contribute to the pool. Wandsworth is also calling for council tenants to be able to use their Right to Buy discount to buy privately, thus freeing up social housing.

The deposit scheme would be interest-free for a period of five years. The average house price in Wandsworth in 2009 was £356,000 compared with £260,000 in 2004 Wandsworth has 3,500 people registered for home ownership, 75 per cent of those registered have savings of £10,000 or below.