Local councils in England have been given new powers to encourage them to build more affordable homes for first time buyers in their communities.
The government has introduced a package of measures that will enable councils to fund homes using Right to Buy receipts, including homes for social rent, and give them greater flexibility over the types of homes they provide to reflect the needs of local people.
It will also give councils more time to use receipts and to develop ambitious building programmes.
Ministers want Right to Buy receipts to be used to help towards delivering 300,000 new homes a year across England by the mid-2020s. This set of reforms, combined with the abolition of the borrowing cap in 2018, gives councils substantially increased flexibilities to build new homes.
The changes took effect on 1 April 2021, except for a new acquisition cap, which will be introduced from 1 April 2022, on a phased basis.
James Jamieson, Local Government Association Chairman, said: “Extending the time limit for spending Right to Buy receipts and increasing the proportion of a new home that councils can fund using receipts will boost councils’ ability to build desperately-needed affordable housing for local communities.”
The new measures include:
• extending the time councils have to spend Right to Buy receipts from three years to five years
• the cap on the percentage cost of new homes councils can fund from Right to Buy receipts raised from 30% to 40% per home, making it easier to build replacement homes
• allowing receipts to be used for shared ownership, First Homes, as well as affordable and social housing.
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