Right to Buy discounts introduced by Thatcher face being slashed

Right to Buy discounts originally introduced by Thatcher will be slashed as part of an affordable housing drive, the Chancellor confirmed today. 

Rachel Reeves announced plans in the Budget to consult on a new five-year social housing rent settlement.

The flagship Right to Buy rules - which allows tenants renting local authority-owned homes to buy them at a reduced rate - will also be curbed to protect existing council stock.

The moves are part of a housing package championed by Angela Rayner that includes £500million in new funding for up to 5,000 new affordable social homes.

Another £128million will support delivering 33,000 new homes through projects across the country.

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

The consultation will also ask for views on other options, such as providing a 10-year settlement.

The Government is also planning greater protections for newly-built social housing and to allow councils to keep 100 per cent of the money raised from Right to Buy sales so they can build and buy more social housing.

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

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

Ms Reeves said: 'We will increase the Affordable Homes Programme to £3.1 billion, delivering thousands of new homes.

'We will provide £3 billion of support in guarantees to boost the supply of homes and support our smaller housebuilders. And we will provide investment to renovate sites across our country, including at Liverpool Central Docks where we will deliver 2,000 new homes, and funding to help Cambridge realise its full growth potential.'

Ms Reeves also acknowledged the need to increase the supply of affordable housing, saying: 'Having heard representations from local authorities, social housing providers and Shelter, I can today confirm that the Government will reduce Right to Buy Discounts and local authorities will be able to retain the full receipts from any sales of social housing so that we can reinvest back into the housing stock and into new supply.

'By doing this we will give more people a safe, secure and affordable place to live.

'We will provide stability to social housing providers, with a social housing rent settlement of CPI plus 1% for the next five years and we will deliver on our manifesto commitment to hire hundreds of new planning officers to get Britain building again.'

The £128million confirms funding in the following projects:

• £56million investment at Liverpool Central Docks to build 2,000 homes
• £25million 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 per cent being affordable
• £47million to local authorities to tackle river pollution that is preventing houses being built. This could support the delivery of an estimated 28,000 homes.

Ms Rayner said last week: '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.'