MPs have criticised the way the government intends to pay for the Right to Buy scheme, saying its funding is “extremely questionable”.
The Communities and Local Government Committee has expressed concern over the funding of Right to Buy for housing association tenants in a new report.
The government proposed to extend the Right to Buy scheme to housing association tenants in England as part of its election manifesto last year. It is included in the new Housing and Planning Bill.
It intends to fund the Right to Buy discounts for housing association tenants with the proceeds from the sale of high value council homes.
The scheme is part of Chancellor George Osborne’s plan to build 400,000 homes by the end of this parliament to help more people get on the housing ladder.
Under the scheme, housing associations can sell homes to tenants at a discount of £77,900 across England and £103,900 in London.
MPs believe the money should come from central government rather than through a levy on local authorities.
The committee warned selling social housing at a discount could lower the quality of homes in the private rented sector and raise prices.
It said that large numbers of homes sold through the current Right to Buy scheme had quickly gone on the rental market and recommend restrictions on housing association properties being rented in the private sector.
Labour MP Clive Betts, the chair of the committee, said success of the policy would depend on the number of houses being built, not just on whether more tenants owned their home.
“As a committee, we are concerned that there are a number of unresolved issues with the Government’s policy which could have a detrimental effect on the provision of accessible and affordable housing, particularly affordable rented property.
“The government needs to set out in more detail on how it will meet its target of at least one-for-one replacement of the sold homes, particularly given issues such as the availability of land, the capacity of the building industry and the uncertainty of income from council home sales.”
