Reinvigorated 'right to buy' scheme will give 1.3m housing association tenants the chance to snap up homes at big discounts
05-29-2015
- Right to buy discounts extended to 1.3m housing association tenants
- Housing Bill will prevent Britain being 'two-speed' country, PM says
- Queen's Speech also announced bans on tax rises in next five years
By Lee Boyce for Thisismoney.co.uk
A new Housing Bill will give 1.3million housing association tenants the right to buy their homes while requiring councils to sell off high-value properties and invest the proceeds into building affordable ones, the government has announced.
The government said the measures, announced in the Queen's Speech to Parliament today, would prevent Britain becoming a 'two-speed country' where only some could afford to buy a property.
Also at the heart of the first Conservative-only Queen's Speech in almost two decades were measures to ban rises in income tax, VAT and National Insurance in the next five years.
More homes: The Government believes giving housing association tenants the chance to buy their homes would help to create more properties being built
Prime minister David Cameron said the 'One Nation' package was a 'clear programme for working people, social justice and bringing our country together', which would also help deliver full employment, increase free childcare and create a 'truly seven-day NHS'.
Setting out the Government's legislative plans, the agenda of 26 bills - plus one in draft form - aims to enact many of the promises made by the Tories during the general election campaign.
Mr Cameron has made no secret of the fact that the absolute majority secured on May 7 allowed him to press ahead with measures previously blocked by the Liberal Democrats.
The right to buy scheme is widely associated with Margaret Thatcher's era as Prime Minister. It was introduced in 1980 to give tenants an opportunity to buy their council home at a discount
The scheme was reinvigorated in 2012 and about 800,000 housing association tenants already have a right to acquire their homes with smaller discounts.
But the discounts have now been significantly increased from as little as £16,000 in some areas to a maximum of up to £77,900 across England and £103,900 in London - the same discounts offered to council tenants.
The Government argues that under the current system, social tenants living in the same neighbourhood can have vastly different levels of discount, or no right to buy at all.
It says the Housing Bill will create a 'level playing field', to ensure any social tenant wanting to buy their home would have the opportunity to do so at the same levels of discount - regardless of whether they live in a council or housing association property.
The money from the sales will be used to invest in more affordable housing, which along with government funding, will allow 'one-for-one' replacements in the same area.
Housing Bill: The Prime Minister says councils will have to sell their most expensive housing when it falls vacant and for the cash to then be reinvested in providing more 'affordable' properties
Housing Bill: The Prime Minister says councils will have to sell their most expensive housing when it falls vacant and for the cash to then be reinvested in providing more 'affordable' properties
It argues the policy could help reduce social housing waiting lists as rather than there being just one rented property there will be two - one with a new homeowner and a new one available for those in need on the waiting list.
The Housing Bill will also require councils to sell their most expensive housing when it falls vacant, with the receipts also being used to provide new affordable homes in the same area.
Remaining funds will also be invested in a new brownfield regeneration fund to increase the supply of new housing.
But some critics say this is not a genuine solution to the wider housing crisis. A shortage of homes has been blamed for sending house prices surging in some areas in recent years.
Recent housebuilding figures showed that number of new homes being started in England by builders is at its highest levels since 2007.
But while work started on 140,500 homes in the year to March, some campaigners point out this is still only around half the level of housebuilding needed to keep up with demand.
Other property schemes announced include extending help to buy until 2020, which helps people by a new home with a fraction of the deposit that would normally be required.
Meanwhile, from this autumn, new help to buy Isa accounts will be made available through banks and building societies.
This will help people to save for a deposit for their first home. It is estimated that around 285,000 first-time buyers will use the scheme a year.
Queen's Speech: It was the 62nd speech Queen Elizabeth has delivered in person - here she is during the State Opening of Parliament in 2012
In terms of the ban on tax increases, the Conservatives say that it gives people an assurance that they will not face any increase in the main taxation rates.
This includes income tax, VAT and National Insurance.
However, critics warn that it could restrict the freedom of the Chancellor to act in the event of another financial crisis.
They also point out that there is nothing to prevent the Government raising taxes through other means - or simply repealing the legislation later in the parliament.
The Government will also bring forward legislation to ensure that people working 30 hours a week on the national minimum wage do not pay income tax.
The legislation - which sits alongside the Government's commitment to raise the personal allowance for basic rate taxpayers to £12,500 - will ensure future increases in the tax threshold reflect changes to the minimum wage.
The speech set the scene for further austerity measures to eliminate the national deficit, confirming plans to run the first budget surplus in 18 years in 2018/19.
Speaking in the House of Lords, the Queen said the Government would 'continue the work of bringing the public finances under control and reducing the deficit so Britain lives within its means'.
It also creates a statutory duty for ministers to report to Parliament on progress towards achieving the Government's goals of full employment and three million new apprenticeships.
A Childcare Bill will provide working parents with 30 hours a week of free childcare for three and four-year-olds.