Right to Buy funding model ‘extremely questionable’, says MPs

The funding model the government intends to use to finance the Right to Buy model strategy has been criticised by the Commons Communities Committee (CCC), which maintains that plans to allow social tenants in England to buy their homes are ‘extremely questionable’.

The committee recommends that the bill be paid directly to tenants, rather than through council house sales. Ministers say the move could help create a million new homeowners by 2020.

Under the voluntary scheme, housing associations will be able to sell properties to tenants interested in buying their houses at a discount of £103,900 in London and £77,900 outside the capital.

Potential buyers must have been tenants for a minimum of three years before can be eligible for the scheme. The government claims that up to 1.3 million housing association tenants will qualify for the opportunity in England.

However, in a report the CCC have said there are insufficient funds to reimburse housing associations, amid claims the scheme could cost more than £11 billion, if every eligible candidate took up the opportunity.

The report warned that many properties sold through the existing Right to Buy scheme had been swiftly put on the rental market and that it might be necessary to limit the ability of housing association tenants to become private sector landlords.

Clive Betts, Labour MP, who chairs the committee, said the success of the policy should be based on how many new houses were built as opposed to whether more tenants ended up owning their own home.

He said: "We are concerned that there are a number of unresolved issues with the government's policy which could have a detrimental effect on the provision of accessible and affordable housing, particularly affordable rented property.

"The government needs to set out in more detail how it will meet its target of at least one-for-one replacement of the sold homes, particularly given issues such as the availability of land, the capacity of the building industry and the uncertainty of income from council home sales."