Thursday, 22 December 2011

Increasing Right to Buy discounts


The government has today published its consultation paper and impact assessment on increasing Right to Buy discounts for tenants in April 2012. It is proposing to increase the cap to £50,000, effectively trebling the discount in some parts of the country.

This will mean, for example, that someone in the West Midlands who had been a tenant for eight years on an household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount.

In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.

The government does not intend to change the qualifying period for eligibility and the proposed changes also apply to the Preserved Right to Buy.

The valuations used in calculating the self-financing settlement payments to end Housing Revenue Account subsidy include a forecast of lost surplus income arising from Right to Buy sales under the current Right to Buy policy.

As the government expects sales to be substantially higher than the self financing projections, the consultation proposes that a part of the Right to Buy receipt should be used to pay down the housing debt supportable from the lost income from these additional sales.

However, under all models mentioned in the consultation paper, the receipts for replacement will require supplementing by borrowing, landlord contributions in land or funds and under some of the options modelled, some additional funding.

The government says it will discuss the proposals with key partners including landlords, lenders and tenant organisations. The consultation closes on 2 February 2012.

6 comments:

  1. Inside Housing reports that new research carried out by property analysts Hometrack claims that 1.4 sales would be needed to fund one-for-one replacement if discounts for tenants were increased in line with the government recommendations. New properties in London would need 1.6 sales.

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  2. Mr Cameron said and I heard it with my own ears that people would be able to purchase council homes under right to buy for half price, meaning the for the half of price of the full value of their homes, turns out its not the case, and only increasing the discount cap to £50,000. What a liar!

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  3. i was near completing buying my council home with a discount of 26000... i stopped everything nw and waiting 4 a decision. my deadline to complete my sale is march 14th, is it worth waiting ,will it really happen???

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    Replies
    1. definately wait you will certainly get thousands more off after april 1st. You will get 50k off at best depending on the no. of yrs youve been a tenant with the council/HA. We went for rTb last year and gave up when our house was valued at 66k and we only had 22k off it in N.East. Under new proposals we should get at least another 11k off on top of that maybe up to 14k off. Wait till the budget on March 21st where it should be decided and then april 1st when its supposed to be implememnted.

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  4. In the consultation paper the government said that, subject to the outcome of the consultation and Parliamentary business, it planned to implement these changes in April 2012.

    You need to check what discount you would be entitled to under the new rules before deciding if it's worth waiting. Best speak to your council - they will be able to advise you.

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  5. what about people who have been living in housing Assoc properties ??

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