Shared ownership boost as councils will build more homes from Right to Buy income

Shared ownership boost as councils will build more homes from Right to Buy income

 

The government will raise the cap on the percentage of replacement units that can be financed by Right to Buy receipts to 40 per cent of existing and future receipts for all eligible tenures in England.

It will allow local authorities to use Right to Buy receipts to provide properties for shared ownership as well as social and affordable rent.

However, the changes will restrict use of Right to Buy receipts for acquiring properties to 50 per cent of a local authority’s total annual delivery which use these receipts, from April 2022.

The cap will reduce step by step over three years to 30 per cent in 2025.

At present, acquisitions make up about 48 per cent of Right to Buy replacement homes.

As well, it will lengthen the time given to local councils to spend Right to Buy receipts on replacement units from three to five years. The longer timeframe will apply to all receipts starting from those taken 2017-18.

There will be no change to the way local authority land is transferred from the general fund to housing revenue account.

The government will not allow Right to Buy receipts to be transferred to arm’s-length management organisations, and it will not suspend interest payments.

The consultation on Right to Buy receipts by the Ministry of Housing, Communities and Local Government closed in October 2018.

It received 198 responses — from local authorities, individuals, associations and interest groups, private companies and arms’ length management companies.