Labour to halve Right to Buy discounts

John Prescott will this week announce plans to halve the Right to Buy discounts available to council tenants in property hotspots.

The government hopes that curbing the scheme will help address the lack of affordable housing available to key workers, as tenants who have bought their homes often sell them to property companies who in turn sell them on for profit.

A spokeswoman for the office of the Deputy Prime Minister says: “Modernisation plans have been put together and this has been talked about for some time now.”

Councils in the South-East have experienced panic buying from tenants trying to buy before the restrictions are imposed. Over 1.7 million homes have been sold to tenants since the Right to Buy was implemented by Margaret Thatcher.

Tenants currently qualify for discounts of up to £22,000 in the North-East and up to £38,000 in the South-East. The latter will be cut to £20,000.

Stuart Aitken, director of credit at Right to Buy lender SPML, believes the move will have little effect on the social housing problem. He says: “A monetary figure seems arbitrary, given that it will be worth next to nothing on some properties. This looks like a targeted limitation, reducing the money that councils will give away but doing little to reduce the attrition of social housing. It will not have much impact on the Right to Buy market.”

Kevin Morgan, managing director of Hitchin-based EZI UK, adds: “Those who wanted to sell have already sold. The money saved will not necessarily be put back into social housing. The government should be proactive, not punitive, against perceived carpetbaggers.”