Reinvigorating Right to Buy and One to One Replacement:

Briefing Paper

March 2012

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

The Right to Buy scheme was introduced in 1980 and gives qualifying social tenants the right to buy their home at a discount. The scheme is open to secure tenants of local authorities and non-charitable housing associations, and to those assured tenants of housing associations whose homes have transferred from a local authority as part of a housing stock transfer.

In “Laying the Foundations: A Housing Strategy for England’, the Government announced its intention to increase the caps on Right to Buy discounts to enable more tenants to achieve their ambition for home ownership. It also set out the Government's commitment to ensure that the receipts on every additional home sold under the Right to Buy are used to fund its replacement, on a one for one basis, with a new home for Affordable Rent. In December 2011, the Department for Communities and Local Government published a consultation setting out proposals for how this would be achieved and seeking views.

The Key points are:

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

For full briefing paper please click here.