Mixed reactions to Right to Buy announcement

The Chartered Institute of Housing (CIH) recognises that the government is aiming to generate resources for housing reinvestment – and is supportive of any measure that increases such investment. However, it believes there are both pluses and minuses in today’s announcement.

Grainia Long, chief executive of CIH, said: “It’s good to see the prime minister continue to push housing issues and to recognise the importance of housing to the country’s economic recovery. We acknowledge that housing receipts will be reinvested into housing and are supportive of the direct role local authorities will be able to take in reinvesting sales proceeds. CIH has lobbied hard for a locally based solution as consistent with the principles set out in the Localism Act and the imminent introduction of self financing for council housing.

“However we have raised concerns over the government’s claim that it can provide one new affordable rent home for each council house sold and believe this provision will be difficult to maintain given the fixed discount policy announced today.

“We also share the concerns of many housing professionals that high levels of discount might not lead to good value for the public purse at a time when the government is encouraging local authorities to get the best out of their assets.

“We were hoping for the provision of a variable discount rather than a fixed one. Our concern is that this might exacerbate the north/south divide and we’re still not convinced will be able to deliver one-for-one replacement on each property sold in all areas. This poses some concerns for rural areas in particular, and we’ll be monitoring the impact of the new policy closely to ensure affordable housing continues to be available in these communities.”

Another measure announced by the government is the NewBuy scheme – the first ever state-backed mortgage indemnity scheme. Under NewBuy, banks will be protected against losses if they offer 95 per cent loan to value mortgages to those buying new build homes up to a value of £500k.

Grainia added: “We are hopeful the NewBuy scheme will help first time buyers to get on the property ladder and we’re pleased the importance of new housing is on the political agenda but we’d like to see the prime minister go further and look beyond construction and homeownership.”

Links and resources

• Right to buy consultation and CIH response
• UK Housing Review 2011-2012
• Letter to Grant Shapps on Right to buy discounts
• Right to buy - CIH policy pages