Prescott acts to stop right to buy abuses

23 Jan 03
Right to buy discounts are being slashed in London and the Southeast as the government tries to conserve low-cost housing for council tenants.

24 January 2003

Forty-two local authorities were this week invited to join a new scheme under which tenants will receive a maximum discount of £16,000 if they buy, compared with up to £38,000 at present.

But, as expected, radical changes that would require primary legislation are being put off while ministers await the results of a study into right to buy abuses and analyse the impact of the discount changes, which come into force in March.

Announcing the changes in Parliament on January 22, Deputy Prime Minister John Prescott said early findings of the study, being carried out by Heriot-Watt University, showed 5% of council home sales in inner London between 1998 and 2001 were to companies that had made deals with tenants for speculative purposes.

'Reducing maximum discounts will straight away act as a disincentive to companies who are profiteering from the right to buy scheme,' he said.

Thirty of the authorities where the new discount limit will apply are in London. Ben Jackson, director of external affairs at Shelter, urged councils to 'put politics aside' and use the new powers to retain houses for the homeless. 'We will continue to make the case for further measures to stop exploitation of the scheme,' he added.

David Butler, chief executive of the Chartered Institute of Housing, welcomed the changes and said the forthcoming Housing Bill could be used to update the right to buy scheme further. 'This should start to reduce the loss of council homes in areas like London where there is a desperate shortage of affordable housing,' he said.

Prescott also announced an extension of restrictions governing the resale of former council homes in rural areas. Local authorities will have more powers to prevent homes being sold on to people who do not live or work locally.

Since the right to buy was introduced in 1980, 1.5 million tenants have bought their homes. According to Shelter, discounts totalling £4.5bn have been given away in the past five years alone.


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