Exempting rural communities from right to buy and cracking down on fraud could help stop vital social housing being lost according to the Chartered Institute of Housing (CIH).
WASHINGTON, D.C. – February 24, 2015 – (RealEstateRama) — Ahead of next month’s Budget the organisation said exempting council houses in areas with a population of less than 3,000 people from the policy would help protect the dwindling supply of affordable homes in rural communities, which is pricing many younger people and families out.
Right to buy discounts were increased in 2012. The Audit Commission estimates that instances of fraud have increased nearly five-fold since 2009/10 and now cost £12.3m a year. CIH is recommending measures to tackle right to buy fraud, including extending the time local authorities have to process applications and putting mandatory affordability checks in place.
Banning people who already own another property and stopping applicants including a third party (other than a joint tenant) on their mortgage application or adding their name to the property deeds would help to make sure the scheme is genuinely helping people to become home owners, not allowing them to become private landlords or to pass the property on to relatives.
CIH is also calling on the chancellor to look at ways of making sure homes sold under right to buy are replaced on a genuine ‘one for one’ basis – including allowing councils to keep more of the cash from each sale and reduce discounts locally.
Interim chief executive Gavin Smart said: “This policy has had a huge effect on the supply of genuinely affordable homes, which is being cut at a time when more and more people are in need. We think it’s time for the government to take a serious look at the way it’s working and the impact it’s having on the number of affordable homes we can provide for people who are struggling.”
He added: “Many rural communities are already at risk of becoming home only to wealthy or older people, with young people and people on lower incomes priced out. Exempting these communities from right to buy would help stem the loss of vital affordable housing. And when homes are sold under right to buy, we need to make sure they are going to people who have a right to benefit.”
CIH’s Budget submission also calls on the government to:
- Set up a £100 million fund to support vulnerable people living in the private rented sector. Councils could bid for cash from the challenge fund to support vulnerable tenants, which would help reduce homelessness caused by private rented tenancies coming to an end (currently the most common cause of homelessness) and give landlords more confidence to let to households they see as ‘higher risk’.
- Remove stamp duty when older home owners in receipt of Pension Credit down-size to smaller properties. Removing stamp duty for older people claiming Pension Credit would make downsizing more affordable for older people on low incomes and free up bigger homes for larger families.
- Allow councils to borrow more so they can build new homes. Increasing local authority borrowing caps by £7bn would allow them to build 75,000 new homes over five years, creating 23,500 jobs and creating £5.6bn of economic activity.