Chancellor to cut back Right to Buy discounts in Budget

The Chancellor will cut back Right to Buy discounts as part of next week’s Budget to boost council housing supply.

Rachel Reeves will announce plans to consult on a new five-year social housing rent settlement and to reduce Right to Buy, which allows tenants renting local authority-owned homes to buy them at a discounted rate, in order to protect existing council stock and keep council homes in the sector.

The moves are part of a housing package that includes £500 million in new funding for up to 5,000 new affordable social homes and £128 million to support delivering 33,000 new homes through projects across the country.

Ms Reeves said: “We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.

“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need.”

The Government will seek to cap what social housing providers can charge tenants in line with Consumer Price Index inflation plus 1%, launching a consultation on a five-year social housing rent settlement.

It also plans greater protections for newly-built social housing and to allow councils to keep 100% of the money raised from Right to Buy sales so they can build and buy more social housing.

The Government will set out its housing strategy in the spring and details of new investment to succeed the 2021-26 affordable homes programme will be set out in its spending review.

The £500 million top-up in funding for the affordable homes programme brings total investment in housing supply to more than £5 billion, the Treasury said.

The £128 million confirms funding in the following projects:

– £56 million investment at Liverpool Central Docks to build 2,000 homes

– £25 million to establish a new fund with Muse Places Limited and Pension Insurance Corporation to deliver 3,000 energy efficient homes, with a target of 100% being affordable

– £47 million to local authorities to tackle river pollution that is preventing houses being built. This could support the delivery of an estimated 28,000 homes.

Deputy Prime Minister Angela Rayner said: “We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford.

“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”

Kate Henderson, chief executive of the National Housing Federation, said the £500 million top-up to the affordable homes programme was a “vital injection of funding” that will support housing associations and prevent a “collapse in delivery”.

She said the federation supports reviewing Right to Buy discounts and the rent settlement consultation, which will “provide both transparency for residents and long-term certainty and financial stability for social housing providers”.

“To achieve the affordable homes needed across the country, alongside this short-term top-up, we look forward to a new long-term housing strategy announced at the next spending review, including a significant boost in funding for social housing.”

Published: 26/10/2024 by Radio NewsHub