Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 25
25
Paragraph: 134
We caution the Government not to make Shared Ownership Right to Buy a condition of...
Conclusion
We caution the Government not to make Shared Ownership Right to Buy a condition of affordable housing grant funding, until our suggested reforms on receipts are implemented. When Right to Buy is implemented for all housing associations, like with the pilots, the Treasury should reimburse housing associations for the cost of discounts. This aligns with the recommendation we made in our report on housing associations and the Right to Buy in 2016. Otherwise, housing associations will face the same difficulties as local authorities in replacing sales.
Paragraph Reference:
134
Government Response
Acknowledged
HM Government
Acknowledged
The Government is committed to introducing a new Right to Shared Ownership on rented homes grant funded through the new Affordable Homes Programme. The Right to Shared Ownership is a separate scheme to the Right to Buy and Voluntary Right to Buy. The Right to Shared Ownership scheme necessitates a bespoke approach to receipts and replacements given that, in the first instance, tenants will only be purchasing a portion of their home. The scheme does not involve a discount and providers will keep receipts from the initial tranche sale and any further staircasing transactions. They will then have flexibility over the use of these receipts. However, in line with the existing approach to the recovery of grant funding on Shared Ownership properties, providers will need to either recycle or repay a portion of the grant that was originally invested in the property. This will ensure that grant funding is reinvested into new supply. On the Voluntary Right to Buy, the Government has been clear that – in line with the 2015 voluntary agreement with housing associations - it will reimburse housing associations for the cost of the discounts. The voluntary agreement also set out the commitment from housing associations to one for one replacement nationally of the homes sold under VRTB, which is being tested through the current Midlands pilot.