District Councils Network urges government to extend Right to Buy spending time limit
0Sector bodies are urging the government to extend proposed reforms to Right to Buy (RTB) receipts to cover money they have already collected.
In August, the government launched a consultation on a number of measures to stimulate housebuilding, including a move to allow councils to retain future RTB receipts for five years, rather than the current three, on a one-off basis.
In its response to the consultation, the District Councils Network said that having two sets of time limits for the use of RTB receipts for the same purpose did not make sense.
Sharon Taylor, District Councils’ Network finance lead, said: “We support the time limit for spending existing Right to Buy receipts being extended from three years to five years so that councils can maximise the benefits of the housing borrowing cap being scrapped, to build much needed homes in their local areas.
“However, this proposal must be extended to the use of future receipts so that councils can ensure that they achieve best value.
“There is no logical reason why future receipts should be subject to a shorter time frame compared to existing receipts.”
Taylor also said the time limit should be extended to seven years for large regeneration projects to avoid deterring major housing schemes.
In its response to the consultation, the Chartered of Institute of Housing (CIH) said: “We regard three years as a typical time for a project to get on site anyway, and for councils that have not been developing at any kind of scale for a very long time the timescale may be longer.
“We also believe that five years should be the standard deadline for all receipts.”
The institute also went further and called for the complete suspension of RTB, saying that net discounts have been running at around £300m a year.
It said: “If this £300m were made available at typical levels of grant for affordable homes, it would produce an extra 12,000 units annually.”
The CIH also urged the government to consider allowing councils to retain 100% of receipts.
In its notes accompanying the consultation, the Ministry of Housing, Communities and Local Government said that it did not want to extend the three year period to five years on a permanent basis “as the ambition is still for local authorities to deliver replacements quickly and local authorities have now had six years since the rules were introduced in 2012 to build up their experience and capacity to develop and deliver new housing”.
Last week, the government announced plans to remove the current cap on housing revenue account borrowing.
