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New extended right-to-buy pilot raises questions over scheme

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Government has announced it will fund a new “large-scale” regional pilot of the extended right-to-buy in a move that suggests the policy may not be rolled out nationally this parliament.

Treasury documents show the government has set aside £250m to fund the pilot which is expected to allow for more than 3,000 housing association tenants to buy their own home between 2017 and 2021.

The original policy, which was a Conservative manifesto commitement introduced in the Housing and Planning Act, would have required councils to sell of their high value homes to fund the policy. Councils fear being presented with a last-minute bill for 2017-18.

The new pilot raises questions about whether the government plans to roll-out the extended right-to-buy nationally this parliament let alone next year. A Treasury spokesman told LGC guidance on that would come from the Department for Communities & Local Government “in due course” and added a region had not yet been chosen to carry out the pilot.

Housing minister Gavin Barwell tweeted that the pilot was a “next step in delivering the mainfesto commitment”. 

Chancellor Philip Hammond made the announcement about the regional pilot in his autumn statement speech.

The autumn statement document contained little detail on how the pilot will work but the costings document said the government had decided to conduct a regional pilot “following an initial small-scale pilot of the voluntary right-to-buy with five housing associations”.

The costings document said: “The costing is calculated by estimating receipts from sales of houses under the pilot, from which spending by housing associations on additional units is deducted… Discounts are estimated by applying average discount rates from local authority right-to-buy sales to housing association estimated house prices.”

Meanwhile, Mr Hammond used his speech to announce a new £23bn national productivity investment fund which will be spent on “innovation and infrastructure over the next five years” to 2021. However, almost a third of that - £7bn – has not yet been allocated. The autumn statement document said that funding allocation would be “made in due course alongside wider capital budgets” for 2021-22.

Of the £16bn which has been allocated almost half – £7.2bn – is dedicated to supporting “the construction of new homes, including spending by housing associations”.

Of this £2.3bn will go towards a new housing infrastructure fund aimed at delivering 100,000 homes in areas of high demand. The document said the funding would be “allocated to local government on a competitive basis” and in particular for infrastructure projects which would then unlock house building.

As had been trailed earlier today a further £1.4bn will be made available for about 40,000 affordable homes, but the money appears to only be available to housing associations. The autumn statement document did, however, confirm the government “will relax restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership”.

Mr Barwell said on twitter: 

Meanwhile, Mr Hammond said communities secretary Sajid Javid would produce the housing white paper “in due course”.

Martin Swales, Solace spokesperson on Economic Prosperity and Housing and chief executive of South Tyneside Council, said: “The Chancellor today has announced a set of measures from national government that recognise the urgency of the housing challenge. The link made between housing supply and infrastructure investment is a very positive step, making the necessary connection to the National Infrastructure Commission. The Solace Housing policy paper in 2015 stressed the importance of adopting this joined up approach.

”The new £2.3bn Housing Infrastructure Fund to enable the delivery of 100,000 new homes in high demand areas is another step towards addressing the structural under supply of new homes. An extra £1.4bn spend on new affordable housing is also a welcome addition to the current fiscal housing package as it introduces greater flexibility to tackle local barriers to housing delivery. The freedoms and flexibilities devolved to support 90,000 affordable homes in London is an approach, the principles of which could be replicated across the rest of the country.”

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