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Posted: 25.03.21

Councils given power to build more homes

Councils given power to build more homes

Councils in England will have more freedom on how they spend the money from homes sold through Right to Buy (the sale of a council house), to help them build homes needed in their communities. The reforms were announced recently by The Ministry of Housing, Communities and Local Government its response to a 2018 consultation on Right to Buy (RtB).

Housing Secretary Rt Hon Robert Jenrick MP said

“Councils have a crucial role to play in increasing housing supply, including building more affordable and social housing.

“I have listened to local authorities who responded to our consultation on the use of Right to Buy receipts and I am delighted to announce a package of reforms providing authorities with the flexibilities they need to develop ambitious build programmes and help get people on the housing ladder.”

The measures include:

  • Extending the time councils have to spend Right to Buy receipts, increasing from three to five years.
  • Increased the cap on the percentage cost of new homes that councils can fund from Right to Buy receipts from 30% to 40% per home, making it easier to build replacement homes. 
  • Allowing receipts to be used for shared ownership, First Homes, as well as affordable and social housing
  • Introducing a cap on the use of Right to Buy receipts for acquisitions to help drive new supply.

The government wants homes supplied using Right to Buy receipts to be the best value for money and to add to overall housing supply to help towards delivering 300,000 new homes a year across England by the mid-2020s.

These changes take effect from 1 April 2021, with the exception of a new acquisition cap, which will be introduced from 1 April 2022 on a phased basis.