Ministers and housing associations hail deal over Right to Buy

The Government has struck a deal with housing associations and the National Housing Federation to extend the Right to Buy.

The first tenants will be able to buy their homes from next year, ministers said, with up to 1.3m families having the chance to become homeowners as a result.

According to the Government, key elements of the deal are as follows:

• Every housing association tenant will have the right to purchase a home at Right to Buy level discounts (subject to the Right to Buy eligibility requirements). “The presumption is that housing associations would sell the tenant the property in which they live.”
• The Government will compensate the housing association for the discount offered to the tenant and housing associations will retain the sales receipt “to enable them to reinvest in the delivery of new homes”.
• Housing associations will use sales proceeds to deliver new supply and will have flexibility to replace rented homes with other tenures such as shared ownership.
• Reflecting the existing Right to Buy, housing associations will have discretion not to sell a particular property in some limited circumstances, for example where a property is in a very rural area and could not be replaced, or where it is adapted for special needs tenants. “However, even in these exceptional cases, housing associations would offer tenants the opportunity to use their discount to buy an alternative home from either their own or another association’s stock.”

Prime Minister David Cameron said: “Some people said this would be impossible and that housing associations would never stand for it. Today we have secured a deal with housing associations to give their tenants the Right to Buy their home.”

Communities Secretary Greg Clark said: “We’re determined to ensure that home ownership is seen as a reasonable aspiration for working people. Right to Buy is a key part of this, offering a helping hand to millions of people who would have no hope of buying their own home without it.

“This historic agreement…. will extend that offer even more widely, while at the same time delivering thousands of new affordable homes across the country.”

National Housing Federation Chief Executive David Orr said: “This reflects our commitment to work in partnership with the government to deliver the commitment to extend Right to Buy, increase home ownership and boost the supply of desperately-needed homes across the country.

“This is a great offer for housing association tenants. It is also a great offer for the country, as our proposal means homes sold will be replaced, delivering an overall increase in housing supply.

“This is an ambitious sector that last year built more than one in three of the country’s homes, matching each pound of taxpayers’ money with £6 of its own. We will build more.”

The Local Government Association has previously warned that extending the Right to Buy to the housing association sector would cost £6bn over the next four years. It also criticised the NHF for striking a ‘secret deal’ with minister to deliver voluntarily the extension of the scheme.

The National Federation of ALMOs and the Association of Retained Council Housing have also expressed disappointment at a lack of consultation. They said the discussions between the Government and the NHF involved matters that impacted on ALMOs and stock holding local authorities, and in which local councils had legitimate interests as strategic housing authorities.