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Reinvigorating Right to Buy and One to One Replacement: Information f

March 2012

This paper summarises thegovernment’s 2012 reforms of the right to buy initiative in England.

The Right to Buy scheme wasintroduced in 1980 and gives qualifying social tenants the right to buy theirhome at a discount. The scheme is open to secure tenants of local authoritiesand non-charitable housing associations, and to those assured tenants ofhousing associations whose homes have transferred from a local authority aspart of a housing stock transfer.

In “Laying the Foundations: AHousing Strategy for England’, the Government announced its intention toincrease the caps on Right to Buy discounts to enable more tenants to achievetheir ambition for home ownership. It also set out the Government's commitmentto ensure that the receipts on every additional home sold under the Right toBuy are used to fund its replacement, on a one for one basis, with a new homefor Affordable Rent. In December 2011, the Department for Communities and LocalGovernment published a consultation setting out proposals for how this would beachieved and seeking views.

The Keypoints are:

  • Thegovernment has increased the discount cap to £75,000 – a £25,000 increase onthe cap proposed in the consultation document, allowing an even greater numberof people to realise their aspiration of home ownership.
  • Thegovernment states that, for the first time, every additional home sold underRight to Buy will be replaced by a new home for affordable rent, with receiptsfrom sales recycled towards the cost of replacement.
  • Localauthorities will be able to retain the receipts for replacement housing –provided they can sign up to an agreement with Government that they will limitthe use of the net Right to Buy receipts to 30% of the cost of the replacementhomes.
  • Councilswill be able to deduct the necessary amount to cover the debt from the receiptbut will not be required to use this part of the receipt to repay loans.

For full briefing paper please click here.

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