My Lords, this order was laid before the House on 5 June. As the Prime Minister and the Chancellor of the Exchequer both recently reiterated, helping people buy their own home will always be part of this Government’s policy for housing, so I am delighted that the reinvigorated right to buy has already helped over 19,500 households achieve their home ownership aspirations since April 2012.
It is not just about buying but about building. Over £419 million from these right-to-buy sales has been ring-fenced to help local authorities fund new homes for affordable rent. Already, 3,000 new homes for affordable rent have been started on site or acquired by local authorities through additional right-to-buy receipts since April 2012. This includes authorities from across England such as Camden, Birmingham and Cornwall, to name but a few.
When we reinvigorated the right to buy in April 2012 by increasing the maximum cap to £75,000, we committed to keeping the discounts under review to
ensure that they remain effective in helping people turn their home ownership dreams into reality. That is why we increased the maximum cash cap for social tenants in London to £100,000 in March 2013 in recognition of the unique nature of the housing market in London. It is why we are proposing, through a separate order, to increase the maximum cash caps annually in line with the consumer prices index rate of inflation, and it is also why we propose, through this draft order, to increase the maximum percentage discount available for houses across England from 60% to 70%.
This change, if it is approved, will provide tenants with a clear message about the discount levels available for all eligible tenants. It will ensure that those living in houses will be able to accrue the same maximum percentage discount as that available to those living in flats. Long-term tenants of houses will benefit from this policy—often those who have committed to the area for 30 years or more. Affording them the same opportunity to access up to the maximum percentage discount of 70%, just as their peers living in flats can, gives them every opportunity possible to achieve their home ownership aspirations and leave a legacy for their families. The revenue from additional sales will be ploughed back into delivering new affordable homes for rent.
The draft order also includes important transitional provisions, which will apply for this year only, to ensure that no eligible tenant currently in the right-to-buy application process misses out. Equally, however, we are mindful that some people who are near to completing the purchase of their property may not want to take up the new discounts, and the draft order will allow them to opt out if they wish.
We have listened to representations from social tenants who have asked to be allocated the same equality of opportunity as their friends and neighbours who are able to buy flats. My officials have also spoken to the Local Government Association and the National Housing Federation, as well as to social landlords.
Bringing parity between the maximum percentage discounts for all properties, combined with the changes we are making to increase the maximum cash caps, is the right thing to do to help more social tenants exercise their right to buy. I commend the order to the Committee.