Prescott stops short of scrapping Right to Buy with discounts cut

News

Piers Wehner

22 January 2003

The government has slashed the discounts available for council tenants who wish to buy their homes, but has stopped short of suspending the Right to Buy policy.

It had been thought that the government would suspend Right to Buy in London and the South East, following a statement made by deputy prime minister John Prescott last year.

But Prescott today announced that discounts in 42 local authorities in London and the South East will be reduced from £38,000 to £16,000.

According to the ODPM the move is aimed at stopping the haemorrhaging of affordable housing in areas of high demand, and to prevent companies profiteering by buying the homes from tenants and selling them on at market value.

Government statistics show that between 1998 and 2001, 5% of all council home purchases in inner London were made by companies making deals with tenants to acquire the properties for speculative purposes.

Prescott said: “Reducing maximum discounts will straight away act as a disincentive to companies who are profiteering from the Right to Buy scheme.

“These companies are offering a short-term cash solution to those who are most vulnerable. We must nip profiteering and exploitation in the bud before it spirals out of control on a national level.”

The changes will come into effect in March.

Although Prescott claims that the move will “modernise right to buy, not abolish it”, some councils have already claimed that the reduced discounts will stop anyone from buying their council homes.

Martin Johnson, cabinet member for housing at Wandsworth borough council, said: “By slashing the discount to the derisory level of £16,000 ministers are as good as saying the scheme is finished. They are closing the door on home ownership for a whole generation of tenants.

“It is unfair to make today’s tenants pay for the failure of the government’s housing policies. The council will be making the strongest representations to the deputy prime minister.”

Wandsworth now expects a rush of applications from council tenants anxious to beat the deadline.

Controversial Muslim cleric Abu Hamza is at the centre of allegations today that he made £100,000 from the sale of a Right to Buy property.

EGi News 22/01/03

The government has slashed the discounts available for council tenants who wish to buy their homes, but has stopped short of suspending the Right to Buy policy. It had been thought that the government would suspend Right to Buy in London and the South East, following a statement made by deputy prime minister John Prescott last year. But Prescott today announced that discounts in 42 local authorities in London and the South East will be reduced from £38,000 to £16,000. According to the ODPM the move is aimed at stopping the haemorrhaging of affordable housing in areas of high demand, and to prevent companies profiteering by buying the homes from tenants and selling them on at market value. Government statistics show that between 1998 and 2001, 5% of all council home purchases in inner London were made by companies making deals with tenants to acquire the properties for speculative purposes. Prescott said: “Reducing maximum discounts will straight away act as a disincentive to companies who are profiteering from the Right to Buy scheme. “These companies are offering a short-term cash solution to those who are most vulnerable. We must nip profiteering and exploitation in the bud before it spirals out of control on a national level.” The changes will come into effect in March. Although Prescott claims that the move will “modernise right to buy, not abolish it”, some councils have already claimed that the reduced discounts will stop anyone from buying their council homes. Martin Johnson, cabinet member for housing at Wandsworth borough council, said: “By slashing the discount to the derisory level of £16,000 ministers are as good as saying the scheme is finished. They are closing the door on home ownership for a whole generation of tenants. “It is unfair to make today’s tenants pay for the failure of the government’s housing policies. The council will be making the strongest representations to the deputy prime minister.” Wandsworth now expects a rush of applications from council tenants anxious to beat the deadline. Controversial Muslim cleric Abu Hamza is at the centre of allegations today that he made £100,000 from the sale of a Right to Buy property. EGi News 22/01/03