Housing

Recent and current policy for the Right to Buy

Discounts

On 10 February 1999 the maximum discounts available to tenants were adjusted to take into account regional differences.

On 27 March 2003 the discounts were reduced to £16,000 in 41 local authority areas that were under the greatest housing pressure, in terms of a high incidence of homelessness and high local house prices.

Buy Back

In March 1999, the government announced a financial incentive to help councils buy back houses and flats from owners facing difficulty. The incentive in effect covers up to 35 per cent of a council's total costs above a threshold of £50,000 per year.

Councils have discretion to decide whom to help and in what circumstances. For example, they are free to decide what price they should offer and whether to offer the owner a tenancy in that or another property (it is open to them to offer a lower price if the owner wishes to stay in the property as a tenant), or to arrange with a housing association to provide a tenancy, or to offer another property for sale. For further information please look in Publications about the Right to Buy.

The Housing Act

The Government's Housing Act received Royal Assent in November 2004 and includes further changes to modernise the Right to Buy. Most of these changes came into force on 18 January 2005.

It is still open to virtually any secure tenant who can afford to buy with the exception of dwellings occupied in connection with their employment (eg some police houses) and housing specially provided for the elderly and (in certain cases) the disabled. But exploitation of the rules for profit will become less financially attractive, discouraging early resales that put upward pressure on prices and recouping for public funds a more reasonable proportion of any appreciation in property values. The Act:

  • extends from two years to five years the period that the tenant must spend qualifying for the Right to Buy
  • extends from three years to five years the period during which owners must repay their discount if they choose to resell their homes, and making the amount repayable dependant upon the resale value of the property
  • exempts dwellings scheduled for demolition from the Right to Buy
  • requires owners who wish to resell properties within ten years of their being sold under the Right to Buy to offer their homes back to a local social landlord
  • makes tenants who enter into "deferred resale" deals to sell on to someone else, often a company, liable to repay discount
  • shortens the time that tenants are allowed to take to complete the purchase of their homes
  • ended the little used Rent to Mortgage scheme

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