Government changes made to the controversial right-to-buy policy have been slammed by council representatives as "a hell of a mess" and biased towards London.
The criticism from the Local Government Association came in the wake of the announcement by deputy prime minister John Prescott that the discounts available to council tenants when buying their homes would be capped at £16,000 in 42 local authorities.

The majority of these councils are located in the London and the south of England.

The reduction, from as high as £30,000 in some areas, will not apply until March and is sure to spark a surge in tenants applying to buy their homes – the very outcome the government is hoping to avoid.

The government's selection criteria are based largely on the level of house prices and the extent of homelessness in the council's area.

Prescott was at pains to stress that the controversial right to buy policy was not being scrapped, but that it was being altered in order to retain more affordable housing for key workers.

He said: "I am taking urgent action to reduce the maximum discounts available. The cost of the right to buy has escalated and the savings from lowering the discount can be put into new social housing."

It is understood this latter comment does not signal a relaxation of government rules surrounding the spending of capital receipts. Rather, it refers to the increased pot of money that will be available overall as a result of increased level of right to buy payments.

Prescott also revealed some of the findings of the work undertaken by Heriot-Watt University for the Office of the Deputy Prime Minister into abuses of the right to buy.

The research was commissioned after concerns emerged that unscrupulous property companies were exploiting the right to buy. The deputy prime minister said between 1998 and 2001, 5% of all council house sales in London were purchased by such companies.

He said he wanted to "nip profiteering and exploitation in the bud before it spirals out of control". Since the right to buy was introduced in 1980, 1.5 million council tenants have used the policy.

Paul Jenks, head of housing at the LGA, welcomed further controls on the right to buy in rural areas that would prevent former council homes being sold on to people from outside the area.

Jenks added: "Well done to the 42 councils, but there are an awful lot of authorities that will be annoyed here who have to deal with increasing numbers of people exercising their right to buy and companies promoting abuses.

"It is a hell of a mess and looks like a policy designed by someone with an intimate knowledge of the London Tube system and nothing else," he added.

Source

Housing Today