Right to Buy Scheme (Hansard, 22 January 2003)

§ Lord Evans of Temple Guiting

The Government fully support the aspiration of the great majority to own their home (there are now nearly 1 million more homeowners than there were in 1997) and we continue to provide a range of schemes to assist still more people into home ownership.

The Government are fully committed to the principle of the right to buy, which has enabled 1.5 million tenants to own their house or flat, and have helped create stable, mixed communities, but the scheme must be kept up to date to reflect the current housing market. Right to buy has changed litttle since it was introduced in 1980, and the Government are particularly concerned about exploitation of the rules and about the way the scheme is now working in areas of high demand for housing.

Right to buy imposes a substantial long-term burden on the public purse (last year's sales will, in due course, result in a long run cost of some £850 million) so it is vital that it meets its objectives effectively. The Government have therefore decided to act to tackle abuses and to reduce the scheme's adverse impact on the availability of affordable housing, in both urban and rural areas.

My right honourable friend the Deputy Prime Minister intends to reduce the maximum discounts available to tenants in 42 areas that are under the greatest housing market pressure, as evidenced by a high incidence of homelessness and high house prices, and where there is also evidence of abuse of the scheme. The areas concerned, mainly urban and all in the South and East of England, are listed below. The maximum discount will be cut to £16,000, the same as the maximum discount available to assured tenants of housing associations under the right to acquire scheme.

Office of the Deputy Prime Minister officials have today written to all the local authorities concerned and to any housing associations in those areas to whom the social housing stock has been transferred consulting them on our intentions. A copy of this letter has been placed in the Library of the House. It provides each local authority with the opportunity to provide reasons why the change should not be made in their area. All representations received will be considered carefully.

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An order introducing the changes will be laid before Parliament next month and will come into effect in March. Any tenant who has applied for the right to buy before the date on which the order comes into effect will be entitled to the current, higher, maximum rates of discount where they qualify for these.

The Government are also determined to ensure that more local people in rural areas can afford a home. The previous administration introduced constraints on the right to buy in some designated rural areas, all national parks and areas of outstanding natural beauty by restricting the resale of homes purchased under the scheme. The Government are now taking immediate steps to increase the scope of those restrictions on resale. My right honourable friend the Deputy Prime Minister is removing the requirement for the area in question to have 3 per cent or more of stock as second homes and will be prepared to designate areas that include towns with up to 3,000 inhabitants (rather than the current limit of 2,000). Office of the Deputy Prime Minister officials are also writing to all local authorities and post-transfer housing associations to inform them that we are relaxing the criteria. A copy of this letter has been placed in the Library of the House. We expect more local authorities will take the opportunity this change now provides to protect the stock of affordable housing stock across much of rural England.

The Government will assess carefully the impact of the changes before determining the need for further modernisation of the right to buy.

AREAS IN WHICH RIGHT TO BUY DISCOUNTS WILL BE REDUCED

London

1. Barnet
2. Bexley
3. Brent
4. Bromley
5. Camden
6. City of London
7. Croydon
8. Ealing
9. Enfield
10. Hackney
11. Hammersmith & Fulham
12. Haringey
13. Harrow
14. Hillingdon
15. Hounslow
16. Islington
17. Kensington & Chelsea
18. Kingston upon Thames
19. Lambeth
20. Lewisham
21. Merton
22. Newham
23. Redbridge
24. Richmond upon Thames
25. Southwark
26. Sutton
27. Tower Hamlets
28. Waltham Forest
29. Wandsworth
30. Westminster

South East

1. Chiltern
2. Epsom & Ewell
3. Hart
4. Oxford
5. Reading
6. Reigate & Banstead
7. Spelthorne
8. Tonbridge & Mailing
9. Vale of White Horse
10. West Berkshire

East

Watford

South West

Christchurch