Better to build new homes than subsidise BTL landlords claims Housing Secretary

The government claims it’s better “to spend taxpayer’s cash building new homes than subsidising buy to let landlords”.

In a speech to the Lloyds Social Housing Forum, Housing Secretary Steve Reed claimed Right to Buy has led to taxpayers subsidising private landlords by paying housing benefit on homes that taxpayers also paid to build.

The government have announced a number of reforms to Right to Buy such as increasing the minimum eligibility period from three to ten years before tenants can apply to buy their home.

Subsidise private landlords

Mr Reed said: “There are over a million families on council housing waiting lists and we’ve seen a near-doubling of the housing benefits bill since 2010.

“Taxpayers pay tens of billions in benefits to subsidise private landlords to rent out homes that taxpayers also paid to build.

“Today, over four in ten homes sold under right-to-buy are rented out privately.  That’s the same home now rented out to tenants at twice or three times the rent compared to when it was a council home.  And taxpayers pick up the bill for the difference.

“This government has started to turn the tide. At the core of our plan is the simple common sense that it’s better to spend taxpayer’s cash building new homes than subsidising buy-to-let landlords.

“We’re radically overhauling right-to-buy to protect the social housing stock and stop newly built homes being sold off.

“To be clear again, we support the aspiration of tenants who want to own their own home, but we also support the aspiration of the million-plus people on council waiting lists to have somewhere decent where they can afford to live.”

Under the Right to Buy reforms, the government has announced that discount rules will be amended, with discounts starting at 5% of the property’s value and increasing by 1% each year up to a maximum of 15% of the property’s value or the cash cap, whichever is lower.

A 35-year exemption will also apply to new-build social homes, meaning they cannot be sold under Right to Buy until 35 years after completion.

Meeting the Decent Homes Standard by 2035

Elsewhere in the speech, Mr Reed announced the government would launch a consultation on extending the Right to Manage to housing association tenants.

It currently only applies to leaseholders and people living in council-managed homes.

Mr Reed also said the Decent Homes Standard would provide the social housing sector with long-term regulatory certainty, with both private and social landlords required to meet the standard by 2035