Councils Given Power to Build More Homes for First Time Buyers and for Social Rent

Councils Given Power to Build More Homes for First Time Buyers and for Social Rent
Apr 15 , 2021

Councils in England will have more freedom on how they spend the money from homes sold through Right to Buy (the sale of a council house), to help them build the homes needed in their communities, under reforms announced by Housing Secretary Rt Hon Robert Jenrick MP.



The package will make it easier for councils to fund homes using Right to Buy receipts, including homes for social rent, and give them greater flexibility over the types of homes they provide to reflect the needs of their communities.



It will also give councils more time to use receipts and to develop ambitious building programmes.



The government wants homes supplied using Right to Buy receipts to be the best value for money, and to add to overall housing supply, to help towards delivering 300,000 new homes a year across England by the mid-2020s.



This set of reforms, combined with the abolition of the borrowing cap in 2018, gives councils substantially increased flexibilities to build the homes England needs.



These changes take effect from 1 April 2021, with the exception of a new acquisition cap, which will be introduced from 1 April 2022, on a phased basis.



Housing Secretary Rt Hon Robert Jenrick MP said:



“Councils have a crucial role to play in increasing housing supply, including building more affordable and social housing.”



“I have listened to local authorities who responded to our consultation on the use of Right to Buy receipts and I am delighted to announce a package of reforms providing authorities with the flexibilities they need to develop ambitious build programmes and help get people on the housing ladder.”



Cllr James Jamieson, Local Government Association Chairman, said:



“The LGA has long-called for reform to Right to Buy and we are pleased government has engaged with us and acted on councils’ concerns.”



“Extending the time limit for spending Right to Buy receipts and increasing the proportion of a new home that councils can fund using receipts will boost councils’ ability to build desperately-needed affordable housing for local communities.”



“We now look forward to working with government to implement these reforms and it is good it will work through any specific local challenges some councils may face as a result of the acquisitions cap.”



New measures include:




  • extending the time councils have to spend Right to Buy receipts from three years to five years


increased cap on the percentage cost of new homes councils can fund from Right to Buy receipts raised from 30% to 40% per home, making it easier to build replacement homes 


allowing receipts to be used for shared ownership, First Homes, as well as affordable and social housing, to help councils build the homes their communities need


introducing a cap on the use of Right to Buy receipts for acquisitions to help drive new supply



On 14 August 2018, alongside the Green Paper, A New Deal for Social Housing, the Ministry of Housing, Communities and Local Government published a consultation on how local authorities could use the receipts they obtained from sales of council housing under the Right to Buy to deliver replacement homes, and how those replacements were measured. 



The consultation received a total of 198 responses, which have been analysed to inform the package of reforms.



Lockdown helped third of UK homebuyers get onto property ladder



A third of UK homebuyers have been helped onto the property ladder due to lockdown according to new research by Yes Homebuyers.



The research found that for 27% of recent homebuyers say the restrictions of the lockdown due to the COVID-19 pandemic meant they were able to save to get a property, with 46% of those asked stating that the drastically reduced spend across their social life helped them to get a foot on the ladder.



A further 33% said working from home and a lack of commuting helped their savings, a reduction in family costs helped 10%, while 6% received an inheritance due to bereavement and 5% saved on rent due to moving back home with their parents.



Matthew Cooper, founder and managing director of Yes Homebuyers, commented: “There’s no-one on the planet who wouldn’t like to erase the last year from history and lockdown has been hard for so many people for a whole variety of reasons.



“At the same time, there have been some great stories of resolve, survival and adaptation emerging across all areas of life and this is indicative of our nation and how we come together when times are tough.



“While we’re all chomping at the bit to get back to some form of normality, it’s also great to see that for a third of homebuyers lockdown has, at least, helped them to achieve their goals of homeownership.



“With little else to spend our money on and a further saving due to the stamp duty holiday, there’s never been a better time to get a foot on the ladder and hopefully, many more will continue to benefit.”


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