The government has launched a £200m large-scale right-to-buy pilot for housing association tenants in the Midlands.
Participation in the pilot will be allocated through a ballot of tenants “to ensure fairness” and “manage interest within the funding available”.
The maximum discounts available, in line with right-to-buy for council housing, will be £80,900.
The £200m allocated for the pilot was announced in last year’s autumn budget and would result in 5,000 purchases if the average discount provided was £40,000. The government previously estimated the scheme would need to raise £4.5bn per year through the sale of higher value council housing. However, that plan was ditched in the social housing green paper, which was published this week.
The pilot will run until spring 2020, when the government will then review the policy.
The National Housing Federation (NHF) helped to develop the pilot. NHF chief executive David Orr, who was highly critical of the social housing green paper for not including measures to significantly increase building of social housing, said the pilot is “not the finished product” and time is needed to “get this major endeavor right”.
He added: “It will be a success for everyone involved only if every home that is sold is replaced with a new affordable home, and if the application process is as smooth as possible for tenants.”
The government published proposals alongside the green paper to provide councils with more flexibility on the use of right-to-buy receipts. These include increasing the proportion of receipts which can be spent on the building costs of replacement homes from the current 30% to 50%. This would only apply in areas where councils meet the eligibility criteria for the affordable homes programme and “can demonstrate a clear need for social rent over affordable rent”. Under the proposals, councils would also be able to bid for funding through the affordable homes programme to top-up insufficient right-to-buy receipts.
Currently councils are required to spend right-to-buy receipts within three years or return the money to the government with interest of 4%, which is then earmarked for delivering affordable housing through Homes England or the Greater London Authority. The government is considering allowing councils to hold the receipts they currently hold for five years, but the three-year deadline would still apply to future receipts.
Another proposal would see a cap on the per unit spend by councils that use right-to-buy receipts to purchase property, which would be based on average build costs. The government says this is because concerns have been raised that the replacement of right-to-buy homes has been hampered by councils purchasing high-value properties rather than returning receipts and interest to the government.
Government stumps up £200m for voluntary right-to-buy pilot