Desperate Newcastle ALMO asks for new limits on right to buy

England’s SECOND largest arm’s-length management organisation is to press the government to restrict the right of tenants of two- and three-bedroom semis to buy their homes.

Board members of Your Homes Newcastle decided to take action at a meeting on 28 September. They were prompted by a projected 63% rise in right-to-buy completions for financial year 2003/4, predominantly affecting its most popular type of property.

Sales are expected to reach 900 this year, compared with approximately 550 last year. Two and three-bed properties will make up 82% of the new sales, but only account for 52% of YHN’s current 32,000 homes over all.

The ALMO will lose a projected £2m in rental income a year at the current rate of sales completions meaning the business plan will have to be scaled back.

YHN attributes the sales to a rise in regional property prices; a fear that restrictions on right to buy will spread to the North; and a desire to buy before investment by the ALMO raises prices over all.

The ODPM has restricted the right to buy in 41 regions in the South of England including limiting the amount of subsidy to £16,000 in areas where there is a lot of homelessness.

“Our major pinch point is two- and three-bed semis but under current legislation we can’t restrict their sale. We want the OPDM to consider restrictions on individual types of property,” said YHN’s head of corporate services Ross Atkinson. He added that other northern ALMOs have reported big rises in right-to-buy sales (HT 16 January, page 12).

But a spokesman for the ODPM said: “A large number of applications gets talked about but we must remember that over 50% of applications will fail.” He also said a cooling of the property market would curb sales.

The Housing Bill that is currently awaiting its second reading in the House of Lords contains further measures to reduce the number of right-to-buy sales.

It will ensure tenants spend five years in a home before they can buy; stay five years once it’s bought to avoid re-paying the discount; and ensure the house is offered for sale to a local social landlord if the owner moves within 10 years.