Councils debate right to buy discount cuts

20 Feb 03
Local authorities are locked in talks with the Office of the Deputy Prime Minister over whether they should slash the discounts on offer to council tenants under the right to buy scheme. Lower discounts, designed to reduce right to buy abuses and reta

21 February 2003

Local authorities are locked in talks with the Office of the Deputy Prime Minister over whether they should slash the discounts on offer to council tenants under the right to buy scheme.

Lower discounts, designed to reduce right to buy abuses and retain more housing for rent, are due to take effect next month. In parts of London and the Southeast, the maximum discount will be cut from £38,000 to £16,000.

But, almost a month after announcing that 42 local authorities were being invited to introduce the smaller discounts, the ODPM has still to reveal how many councils will sign up.

Some, including Westminster City Council, have indicated that they want to stick with existing discounts to encourage continuing sales. 'In an area like this, where house prices are so high, it's not worth having right to buy if you reduce the discount,' said a spokesman for the Tory-controlled council.

But Labour-run Greenwich is upset that it was one of just three London authorities not invited to join the scheme. An Association of London Government study, to be published next week, will show that housing need is as high in Greenwich as elsewhere in the capital.

Those not wishing to cut discounts must gain permission to opt out, although it is unclear whether a council such as Greenwich can opt in.

Gwyneth Taylor, programme manager for housing at the Local Government Association, doubted whether more than a handful of councils would opt out. 'The motivation is primarily political,' she said.

The ODPM, meanwhile, has accidentally published research into right to buy abuses showing that 6% of sales in London are a result of leasing companies offering tenants an incentive so that the company can rent out the property once it is sold by a council.

The research, carried out by Heriot-Watt University, was placed on the ODPM website last week and then hastily removed. It is due to appear again in March, when the list of councils offering lower discounts will also be published.

Up to 20 leasing companies buy about 500 council homes in London each year, the study found. In some boroughs, more than a quarter of council homes sold under right to buy three years ago are now rented privately.

PFfeb2003

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