Housing minister says Right to Buy has been 'overly generous' as he slashes sale discounts to fund council homes

26 October 2024, 11:47

The Housing minister has told LB of plans to cut “overly generous” Right to Buy discounts to protect council housing.

Matthew Pennycook, Minister for Housing, Communities and Local Government, told LBC’s Matthew Wright of planned changes to the scheme ahead of the government’s first Budget.

The discount, first introduced by the Conservative-Lib Dem coalition government in 2012, currently allows renters to buy their homes from councils at a discount of 35%, which can rise to a maximum of 70%.

On Saturday, the government announced major cuts to the discounts, with Mr Pennycook saying: “Those overly generous discounts have seen far too many genuinely affordable social rented homes sold off, unable to be replaced.

Read more: Government to cut Right to Buy discounts at Budget to boost council housing

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Watch Again: Matthew Wright is joined by Housing Minister Matthew Pennycook | 26/10/24

“We do want a right to buy system that is fair, that is sustainable, as I said we want long-term tenants who paid rent on their homes for many years to have the opportunity to buy.

“We think that's right in principle, that's why we've not said the right to buy a scheme should be scrapped entirely.

“But we have got to do more to better protect our stock given the acute and entrenched nature of the housing crisis that England faces.”

Next week’s Budget will be Labour’s first in 14 years, and will also include a £500 million boost to the affordable homes program in order to build more social homes.

This will bring total investment in the housing supply to over £5 billion - and support the delivery of 33,000 new homes through £128 million for housing projects across the country.

The Government will also be consulting on a new five-year social housing rent settlement that will give the sector more long-term certainty on funding and allow them to invest in tens of thousands of new homes.

Mr Pennycook added: “We absolutely do want to deliver, as our manifesto made very clear, the biggest increase in social and affordable house building in a generation.

“There is no way out of the housing crisis that does not involve a significant uplift in the building of those types of homes.”

Next week’s highly anticipated Budget will contain further details of how Labour plans to fulfil its manifesto pledge of ensuring social housing is available for those who need it and deliver 1.5 million homes.

The Chancellor of the Exchequer, Rachel Reeves, said: “We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.

“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need.”

The scheme is supported by Deputy Prime Minister Angela Rayner, who used the Right to Buy scheme to buy her own home in Stockport in 2007, before selling it at a profit of £48,500 in 2015.

Ms Rayner said: “We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford.

“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”