Flagship Tory council presses Government on Right to Buy receipts

Published by Jon Land for 24dash.com in Housing

Hammersmith & Fulham (H&F) Council has called for local authorities to be allowed to retain all receipts from sales under the new Right to But scheme to enable them to build more affordable homes.

The Conservative-controlled council has been actively lobbying Government for a change in Right to Buy policy after seeing a slump in sales from 245 in 2003 to 2004 to just seven last year. This slump can be attributed to the fact that the Right to Buy discount was slashed from £38,000 to £16,000 in 2004.

Currently, when a social housing tenant buys their property under Right to Buy the majority of the proceeds go to Central Government but H&F says this must change if the Government is going to get close to the 'one for one' aspiration it set out in Monday's Housing Strategy.

Councillor Andrew Johnson, cabinet member for housing, said: “The Right to Buy was a fantastic policy which has helped hundreds of social tenants within Hammersmith & Fulham to buy their own home since it launched but completions under the scheme all but collapsed when Government reduced the maximum discount in 2004.

"We therefore warmly welcome the good news that the Government is looking at how a new generation can have access to the same home ownership opportunities. However, in the true spirit of localism, it is absolutely crucial that councils are able to make decisions that genuinely meet the needs of local people.

"In seeking to build the Borough of Opportunity we want to do far more to encourage home ownership and enable our tenants to become homeowners.

“It is vital that councils are able to have the freedom to manage our housing assets and Right to Buy receipts to deliver home ownership opportunities for more of our residents, whilst at the same time providing new housing stock so that we can deliver the local regeneration necessary to arrest and reverse local deprivation.

"We also need to immediately end the complex regulations that make it difficult for councils to boost local investment in new housing. No one knows more about the housing needs of their own communities than local authorities and if we were able to spend all of the proceeds of the rejuvenated Right to Buy we would be able to tackle many our housing problems head-on.

“The new Right to Buy scheme will get more hardworking families onto the property ladder but unless all of the proceeds are put into the hands of councils so that they can build more affordable homes where they are most needed, this once-in-a-generation opportunity to confront many of our most serious housing issues will be not be fully grabbed.”

The council also argues that money raised from Right to Buy could be used to help first-time buyers onto the property ladder if they were able to establish a Tenant Deposit Fund. This would give residents access to mortgage finance direct from the council.

The initiative would be aimed at low and middle-income working households who may not qualify for social housing, but at the same time don’t have the finances to get onto the property ladder.

Cllr Johnson added: “As the Borough of Opportunity, we want to do all that we can to help those who aspire to own their own home, but are currently priced out of the market, to be able to fulfil their dream of purchasing a stake in their future. A Tenant Deposit Fund working in tandem with increased autonomy of Right to Buy receipts provided the best way to fulfil that aim.”

H&F recently announced that it would look to tackle the housing shortage in the borough by returning to housebuilding for the first time in 30 years. By setting up its own housing company, the council will be able to directly provide new affordable homes to buy or rent.

The move gives the council the ability to develop and manage homes on its own land, and has the potential to create hundreds of high quality, affordable homes, including larger accommodation for families so they can stay in the borough while owning a stake in their own home.