More than 2 million council homes up for grabs as PM revives Right to Buy

Published by Ross Macmillan for 24dash.com in Housing

David Cameron is to restore the attractive discounts for tenants to buy their council properties, in a bid to fund up to 100,000 new homes for families stuck on waiting lists.

The Prime Minister announced plans to revamp Margaret Thatcher's Right to Buy (RTB) policy - brought in more than 30 years ago - during the opening of the Conservative Party Conference in Manchester.

Back then, however, it was accompanied by a block on local authorities to spend the proceeds on new housing so the two million-plus homes sold through the scheme were not replaced.

As a result the scheme contributed to a reduction in the number of available council homes and there is now a shortage of social housing across the UK.

RTB gave tenants who had lived in their home for up to three years a 33% discount on the market value of their home, increasing in stages up to 50% for a tenancy of 20 years.

However, under Labour, discounts were reduced to very low levels, which resulted in fewer people being able to take up Right to Buy.

This time Cameron expects the policy to pay for the building of new homes which he says will create some 200,000 jobs.

In a separate document, issued by Communities and Local Government (CLG) today, it said the "proceeds will be invested in paying down the debt associated with that property and on building new housing for affordable rent".

The Government does not intend to include housing association tenants with the Right to Acquire under the scheme. 

Speaking on the Andrew Marr Show, Mr Cameron said: "The housing market isn't working. Why isn't it working? Because of the debt crisis. The banks are bunged up with debt so the banks aren't lending and the builders aren't building, buyers can't buy because they can't get the mortgages they need.

"We're saying let's bring back the Right to Buy your council house with proper discounts that Labour got rid of and let's use that money to build homes for low rent for families stuck on housing lists."

The Government says it will be consulting on the proposals to increase the discounts, with changes needing to be made to secondary legislation.

It said further details will be published shortly as part of its Housing Strategy.   

Around two million homes are thought to be still available to purchase under Right to Buy.

Addressing the issue of affordability, the CLG document said: "38% of social tenants are well-off enough not to need housing benefit and over 800,000 tenants are in full-time work. Nearly 60% of social housing tenants who are couples with children do not claim housing benefit. Therefore many social tenants will be able to meet the cost of the mortgage after allowing for the discount."

Cameron also said today that 100,000 homes could be built using surplus Government land. The Government's 'build now pay later' scheme will see developers pay for the land once they've sold the homes.

Mr Cameron added: "Taking those two policies together that could be 200,000 extra homes and 400,000 extra jobs."