Right-to-buy to shake up local housing market (From Worcester News)

Right-to-buy to shake up local housing market

9:30pm Thursday 12th January 2012 in Local By Richard Vernalls , @rvernallsWN #worcsnews

RIGHT-TO-BUY could be back in fashion if the latest Government plans get the nod.

But there are concerns that boosting the number of homes sold could lead to longer waiting times for people on the housing lists.

The Government is proposing to raise the cap on the discounted purchase price offered to council house tenants, which includes about 3,600 tenants of Worcester Community Housing (WCH).

Housing Minister Grant Shapps said current discounts had been miserly and were capped at £26,000 at their highest – roughly a quarter of the average community housing house price according to Helen Scarrett, WCH’s housing and customer services director.

Tenants gained the right-to-buy if they had been in their council house for five years.

When the city’s council house stock was transferred in 2004 so was the right-to-buy with the majority of WCH’s 4,000 tenants still retaining it.

Anyone signing a tenancy agreement after that date is not eligible.

Mr Shapps said he wanted to increase the discounts and make it a meaningful tool for people to get on the housing ladder.

Eligible tenants would have a right to a 35 per cent discount of the value of the property, increasing by one per cent for each year they live there up to a maximum discount rate, or 60 per cent of value – whichever threshold is passed first. For flats, tenants start at 50 per cent discount rising to 70 per cent.

The minister said: “I am determined to maintain the number of affordable homes for rent so for every additional home sold, it will be replaced by a new affordable home on a one-for-one basis.”

However, details are yet to emerge as to how this will happen although the Government has set aside £400 million to kick-start stalled developments.

The Government grant money, which housing associations like WCH currently get from the Homes and Communities Agency, works out at about £50,000 per house.

Mrs Scarrett said any WCH homes sold would recoup any of its property refit costs, but she said the housing association does not actually receive any of the bricks-and-mortar sale cash which instead goes to Worcester City Council and to the Government.

“At the moment, we’re building more homes than we sell,” she said.

“We only sold four homes under right-to-buy this year, but if this scheme takes off and more are sold it might decrease the housing stock and that will need to be carefully monitored.

“We will be consulting with the Government.”