The Chancellor has announced a reduction in the Right to Buy discount offered to tenants purchasing their council house. Reeves confirmed the reduction of Right to Buy discounts and that local authorities will be able to retain 100% of the receipt of these sales (they had previously had to return a percentage to the Treasury)
According to the government, England’s existing social housing supply is depleted every year by the Right to Buy scheme and also disincentivises councils to build new social housing.
The discount, first introduced in 2012 by the Conservative-Lib Dem coalition, allowed renters to buy their homes from councils at a discount of 35%, which can rise to a maximum of 70%.
However, research earlier this year by the District Councils’ Network revealed that 6,000 council homes were sold under the scheme in England last year but only half of them had been replaced.
Discounts will be reduced alongside greater protections for newly-built social housing and councils will be able to keep 100% of the receipts generated by a Right to Buy sale, enabling councils to scale-up delivery of social housing while still enabling longstanding tenants to buy their own homes.
Cllr Louise Gittins, chair of the Local Government Association said: "The LGA has long called for reform to RTB and these positive measures will support the replacement of sold homes and to stem the continued loss of existing stock."
Ryan Etchells, Chief Commercial Officer at specialist mortgage lender Together, said: “The Chancellor’s reduction in the discount allowing tenants to buy their council homes under the Right-to-Buy scheme will mean they will have to pay, in most cases, tens of thousands of pounds more to be able to get on the housing ladder.
“The Government says this will make the RTB scheme ‘fairer and more sustainable’ but the move seems incredibly unfair, when some people who may have lived in their council homes for years and had planned to make it their own will now be simply locked out of home-ownership for good.
"Together’s own research shows nearly a third want to see housing and planning reforms addressed in the first 12 months of Labour's government, with 12% wanting more help for first-time buyers and 7% keen to see the creation of new property schemes to help assist people’s property ambitions by January 2025. Disappointingly, the ruling on RTB works directly against the public's wishes."
