§ The First Secretary of State (Mr. John Prescott)The Government fully supports 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 is fully committed to the principle of the right to buy, which has enabled 1.5 million tenants to own their house or flat, and has 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 little since it was introduced in 1980, and the Government is 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 £850m) so it is vital that it meets its objectives effectively. The Government has 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.
I therefore intend 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.
15WSWe 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. I will consider carefully all representations received.
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 is 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 is now taking immediate steps to increase the scope of those restrictions on resale. We are 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). We are writing to all local authorities 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.
16WSThe Government will asses carefully the impact of the changes before determining the need for further modernization of the right to buy.
London South East East South West 1. Barnet 1. Chiltern Watford Christchurch 2. Bexley 2. Epsom & Ewell 3. Brent 3. Hart 4. Bromley 4. Oxford 5. Camden 5. Reading 6. City of London 6. Reigate & Banstead 7. Croydon 7. Spelthorne 8. Ealing 8. Tonbridge & Mailing 9. Enfield 9. Vale of White Horse 10. Hackney 10. West Berkshire 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