Halve right-to-buy discount and let councils invest all proceeds, select committee urges

The Office of the Deputy Prime Minister select committee said the discount received by council tenants when they buy their homes should be halved, at least.

The MPs' committee also said all money from the sale of homes should go back to loacl authorities to spend on housing.

The committee made the recommendations in its report, published on Tuesday, on the Draft Housing Bill. The bill extends the qualification period for the right to buy from two years to three and makes the discount a percentage of the property's real value.

The committee, though, recommended that right-to-buy discounts should come down from a maximum of £32,000 to just £9000-£16,000.

The change would bring the scheme into line with discount changes made in 41 councils in March (HT 14 March, page 13), and the right to acquire scheme, which allows housing association tenants to buy their homes.

Under the right to acquire, housing associations can keep all money from sales of their homes and put them back into housing. The right to buy generally allows councils to keep only a quarter of the money; they must give the rest to the government to cover debt.

However, one council said the select committee's proposals did not go far enough to tackle abuses of the right to buy.

Martin Green, divisional leasehold manager for Southwark council, said the bill needed to stop people from subletting properties bought under the right to buy.

He also expressed disappointment with the plan to ban subletting for five years, until the repayment period for the right-to-buy discount had expired. "This might have marginal effect. Subletting of right-to-buy properties should be banned indefinitely," he said.

However, the Local Government Association and the Chartered Institute of Housing were pleased with the committee's proposals.

Merron Simpson, head of policy at the CIH, said she would like to see regionally sensitive discounts.

Gwyneth Taylor, LGA programme manager, said: "It's always been our stance that right to buy should be bought more into line with right to acquire. It's a better scheme and fits the move towards and single social tenure."

Select committee chairman Andrew Bennett said guidance was urgently needed on the bill's health-and-safety rating system for housing.

He also said the Home Information Pack, which gives information to homebuyers including surveys, would not speed up the homebuying process.