Queen’s Speech 2015 – Right To Buy extension and new ‘starter homes’
The government's legislative plans for the year ahead have been unveiled in the Queen's Speech to Parliament. We take a look at what's in it for housing - and what's missing.
June 1, 2015
Right To Buy Extension
The Housing Bill announced in last week’s Queen’s Speech will include an extension of Margaret Thatcher’s right-to-buy scheme, allowing England’s 1.3 million housing association tenants to purchase their homes with the same discounts offered to council tenants. That’s £102,700 in London and £77,000 for the rest of England.
There will be a discount of 35% of the market value of a house after a housing association tenant has been in it for three years, with the discount rising 1% for every extra year the tenant has rented in the public sector. In the case of a flat, the discount would be worth 50% of the market value after the first three years, rising by 2% each year afterwards.
How will it be funded?
Local Authorities will be required to sell off their most expensive properties whenever they become vacant. The government estimates this would raise £4.5bn. The councils will then have to build replacement homes with the money raised, and the surplus will be used to fund Right to Buy. The government say they will make up any difference. The National Housing Federation has said the policy will cost up to £5.8bn a year because compensation will have to be paid to housing associations.
Replaced on a one-to-one basis?
Ministers have said that every extra home sold when the new discount comes into force will be replaced on a one-for-one basis. This has come under criticism as the track record for replacement is not good: Government figures show that for 26,185 council homes sold through right-to-buy since 2012, only 2,712 replacements have started to be built, a rate of about one-to-10.
The overwhelming majority of people want to own their own home, rather than rent. Widening out the right to buy scheme will help those that have access to it, but at the cost of reducing the stock of social housing.
The Government knows that people feel stuck in the private rented sector faced with sky high rents on one hand and crazy house prices on the other. So while extending Right to Buy might be good politics it’s not good policies. The only way to address the housing crisis is building more new affordable homes in the right places.
What else is included in the Housing Bill?
The government has also announced plans to deliver 200,000 new starter homes across the country. These new homes will be sold with a 20% discount to first-time buyers under 40. A new register of brownfield land is also intended to help fast-track the construction of new homes on previously-used sites near existing communities.
A ‘Right to Build’ in the Bill will also help increase housing supply and diversify the housing sector by giving people the right to be allocated land with planning permission for them to self-build or commission a local builder to build a home. Self-build delivers a majority of homes in many other countries and can act as a boost to smaller and medium sized builders.
What is missing?
The HomeOwners 2015 Annual Survey identified a number housing policies that the electorate supported.
The survey, carried out by YouGov, found that the overwhelmingly most popular policy would be a requirement for developers to market homes in the UK before marketing them overseas, a policy put forward for Londoners by Boris Johnson, with 80% of adults supporting it and only 3% opposed. Will we see this popular policy broadened beyond London with a Conservative second term?
The HomeOwners Annual Survey identified the second most popular housing policy, proposed by Labour, was charging higher council tax rates on homes that are not occupied year round, with 70% supporting it and only 13% opposed.