28 January 2005
Only half of the homes bought by council and housing association tenants under a new shared equity scheme are likely to be replaced, landlords were told this week.
As housing associations breathed a sigh of relief that the right to buy will not be extended to their sector, there was uncertainty over the long-term effect the Office of the Deputy Prime Minister's alternative will have on social housing.
Under the equity scheme, known as Social Homebuy, tenants will be able to buy shares worth up to 75% of the value of a home and eventually purchase the property outright.
Although it will be up to landlords whether they offer their tenants equity shares, ministers are hoping that councils and housing associations will be attracted by the fact they will have first option to buy homes back if a tenant moves on.
Landlords will also retain all receipts from property sales. 'It will be a matter of judgement on the part of the landlord as to how receipts are deployed into social housing,' said housing minister Keith Hill.
The ODPM estimates that up to 300,000 tenants will benefit from the scheme – many of whom are not eligible for right to buy. About half are likely to end up in full ownership.
But speaking at the launch of the ODPM's five-year housing strategy on January 24, Hill said the government only expected landlords to build one new home for every two sold – raising the possibility of 75,000 fewer homes available to rent by 2010.
Sarah Webb, policy director at the Chartered Institute of Housing, said there would undoubtedly be a reduction in social housing. 'We are turning rented housing into owner-occupied housing,' she said.
The strategy – 'Homes For All' – also includes a first-time buyers, scheme using publicly owned land. One hundred former NHS sites will be among those developed, with homes offered to key workers and other first-time buyers at below market price.
It was published as the Commons' housing, planning and local government select committee produced a report demanding that right to buy not be extended and that more social housing should be produced to combat rising homelessness.
The government is promising that a total of 1.1 million new homes will be built by 2016. Other areas in Southeast England can bid for £40m to support development outside the four growth areas already identified around London.
PFjan2005
