Housing Minister Grant Shapps has unveiled details of how thousands of new affordable homes will be built using the proceeds from the Government’s Right to Buy Scheme.
Shapps stated that local authorities would have more time to take advantage of the rejuvenated scheme, having three years to reinvest funds raised from additional sales into new housing. He added that local authorities will now have a “prime opportunity” to refresh their housing stock and help meet the housing needs of those currently on the waiting list.
The Right to Buy scheme was re-launched last month, giving 2.5 million social tenants the opportunity to buy their home with discounts of up to £75,000.
The ambition of the Housing Minister is that extra Right to Buy home sold will be replaced by a new affordable home to rent nationally. As part of making this an achievable aim, after listening to the concerns from local councils, the timeframe for spending the receipts has been increased from two to three years.
Under the new agreement between Whitehall and Town Halls, councils will have the opportunity to keep receipts from Right to Buy sales and the ability to spend the money on meeting local housing demand.
It will be up to councils to decide on the type, size and location of the new houses built. They will be able to work with other organisations, such as housing associations, to finance and deliver affordable housing. Councils can also decide to pass the money to Whitehall so that one-for-one replacement of social housing can take place at a national level.
Shapps has stated that Right to Buy funds should account for no more than 30% of total investment in new homes, and this should be in place of government funding. This is in line with the Affordable Homes Programme, which is expected to deliver up to 170,000 new affordable homes by 2015.
The aim is for new homes to be delivered as quickly as possible, and this is why councils must spend the income from the sales on new housing stock within three years. Any money left after three years will be spent to Whitehall where it will be reinvested in housebuilding nationally.
Grant Shapps commented:
“By upping the Right to Buy discount to a maximum of £75,000 we’ve given hope to thousands of council tenants who want to own their own home, and for the first time in years, social housing is on the move.
“For every property sold under Right to Buy we’re giving councils the flexibility to build the houses they need, where they need them — or to work with us to ensure every penny raised through the scheme goes towards housebuilding. I’ve listened to their views, and they now have three years to make the most of the extra funds the scheme will bring.
“This is a prime opportunity for councils across the country to refresh their housing stock, handing the keys to thousands of tenants who want to cross the threshold to home ownership and building new affordable properties to rent for local families who for too long have been left languishing on the waiting lists.”
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