London Councils welcome Ruth Kelly's Social HomeBuy plans » Housing » 24dash.com

London Councils has welcomed Ruth Kelly’s announcement that the minimum level at which a housing tenant can purchase a proportion of their home under the Social HomeBuy scheme will be reduced to 10 per cent.

This reduction was first proposed last year, following publication of the London School of Economics report ‘A Stake in the Future’.

London Councils argued that such a measure was necessary to take account of the inflated house prices in the capital.

Ruth Kelly’s announcement comes in a week when the average price of a new home in the capital was revealed to be £250,000.

The proposed reduction will mean that more housing tenants will be able to gain a foot on the property ladder, despite the continuing growth of house prices in London.

London Councils plan to build on this success and call for the introduction of a London-wide landlord savings scheme which was also recommended in the LSE report.

London Councils Executive Member for Housing Councillor Jamie Carswell said: “We welcome the Government’s decision to lower the minimum proportion at which tenants can buy into the Social HomeBuy scheme.

"This is a move we specifically called for last year, and we are pleased to see that Ruth Kelly has accepted our arguments.

“House prices in the UK and particularly in the capital are constantly rising. Unless we address the growing wealth gap between homeowners and renters we will see growing divisions in society as wealth inequality is handed on from one generation to the next.

"London’s communities will be divided by wealth, with many having to flee the capital just to afford a home of their own.

“Equity stakes schemes are one way to address this problem, but we need to make them affordable enough for council tenants and to do this they must reflect the current housing market.

"The reduction of the minimum proportion to 10 per cent will make the scheme far more affordable in London and help greater numbers of tenants to achieve greater financial security.

“However it is vital that ‘asset-based welfare’ for social tenants is not restricted to the ability to buy a part or whole share in their property, but that it includes support in building up savings - which even at low levels can bring significant benefits.

"Also recommended in the ‘A Stake in the Future’ report was the development of London-wide landlord savings scheme for local authority tenants. London Councils will be acting on this recommendation to build on our success over Social HomeBuy.”

Meanwhile, Chairman of the Local Government Association, Lord Sandy Bruce-Lockhart was less enthusiastic by today's announcement.

He said: “Everybody has the right to buy their own home, and right-to-buy schemes give a much needed foot-up onto the property ladder for people with low incomes.

"But the number of people who currently benefit from these schemes is a drop in the ocean compared to the one and a half million people on local authority housing waiting lists.

“The real issue at stake here is the drastic shortage of affordable housing, both rented and shared ownership, and the government’s housing policy that often leaves councils hamstrung.

"If the minister really is keen to ‘kick-start’ the debate on housing, her focus must be on devolving the powers to local councils which would let them decide how many new homes are needed in their area, of what type, and where they should go. Then, for councils to have the powers to make sure these homes are built.

"Only councils can make the necessary links between housing needs, employment opportunities, transport provision, education, health and community facilities to make sure the right kind of homes are provided in locations where people want to live, work and raise their families.

"The case for delivering a major increase in all types of affordable housing provision has never been clearer.

"If the government is serious about its commitment to improving our communities and providing decent housing for all, it must make sure councils and their partners receive investment which matches these aspirations.

"The Chancellor needs to earmark £11.6bn in the upcoming comprehensive spending review to help provide the 210,000 new affordable homes that are needed over three years from 2008."