Housing associations to be ‘seduced’ into accepting Right to Buy extension plan
Housing associations will be “seduced” into accepting the government’s new Right to Buy proposals, but will not see funding reduced if they refuse to comply, the housing secretary has said.
Answering questions at a Levelling Up, Housing and Communities (LUHC) Committee meeting on Monday about whether housing associations would be compelled to comply with the Right to Buy extension, Michael Gove said landlords would not be forced but will be seduced to take part in the scheme.
He said: “When we had voluntary Right to Buy, 44 housing association chose to take part, most were of significant size. I will be talking to housing associations, making it clear that funding is available so they will see replacement stock at one-for-one and like-for-like.
“I hope on that basis, our direction of travel will be embraced. My intelligence so far is that while housing associations quite rightly have a number of questions, they are not opposed in principle quite the opposite.”
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The comments came after prime minister Boris Johnson’s speech last week in which he announced a number of new Right to Buy announcements, including the plan to extend the scheme to housing association tenants.
Under the proposals, Mr Johnson promised to work with housing associations over the coming months to devise a scheme that would see “one-for-one” replacement of homes.
When asked by Clive Betts, chair of the LUHC Committee, whether housing associations that do not participate could see their grant funding reduced, Mr Gove said he does not “anticipate” or “contemplate” that happening.
Mr Gove was also asked about how the plan would be funded and whether the government would make up the difference between the market value of a home sold and the cost of replacing it.
He confirmed that this would be the case, saying: “Yes, we would be in a position to ensure housing associations don’t see detriment to their balance sheets as a result of this.”
The housing secretary explained that the money would coming from across the government, but was unable to pinpoint its exact source. Nevertheless, he said the Treasury had agreed to fund the scheme and that it would not come from existing Department for Levelling Up, Housing and Communities’ budgets.
Mr Gove explained that this was a question that needed to be sorted quickly, saying: “By definition we better crack on [with understanding the funding] because we can’t have conversations with housing associations that we would like, without them having greater assurance on funding that’s understandable, but I’m not in a position yet to say exactly how it will be funded.”
He added that the numbers would be capped every year and there would be a limit as to how many people could exercise their right. This could lead to the creation of a waiting list system, where some tenants would have to wait years to take up their Right to Buy option.
Earlier in the session, Mr Gove responded to comments by his predecessor, Robert Jenrick, that the number of homes being built was likely to go backwards from the 240,000 homes built last year.
Mr Gove said: “It wasn’t a stretch before pandemic, we had reached a record high of 244,000 completions and the number of first-time buyers that year was also at a record high, but since then, of course, there are a number of economic headwinds which are made life more difficult.”
Asked whether the 300,000 homes a year target would remain, Mr Gove responded that this was in place. He added: “It is still in place, will we meet it, we will do everything we can, but there are a number of factors that can make and have made it more difficult.”
