Housing body calls for right-to-buy crackdown

http://www.theguardian.com/money/2015/feb/24/housing-body-calls-for-right-to-buy-crackdown

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Exempting rural communities from right-to-buy and cracking down on fraudulent purchases are among measures that should be considered by the government to stem the loss of social housing, the Chartered Institute of Housing said on Tuesday.

The group, which represents the property industry, said stopping the sell-off of council homes in areas with a population of less than 3,000 would help younger people and families who are being priced out of rural homes.

The Rural Affordable Housing commission has estimated that a minimum of 7,500 new affordable homes need to be built each year in villages with fewer than 3,000 inhabitants, but in 2013 just 2,886 were completed.

Since right-to-buy discounts were increased in 2012 there has been a renewed interest from buyers, but this has gone hand-in-hand with an increase in fraud.

In October, the Audit Commission reported that right to buy fraud cases had risen five-fold between 2009-10 and 2013-14 and were now costing £12.3m a year.

The CIH said local authorities should be given longer to process applications and put mandatory affordability checks in place to ensure that tenants who bought homes could keep up with repayments. It said that there was anecdotal evidence from councils to suggest that tenants who were reliant on a state pension and/or housing benefit were routinely able to complete a purchase.

It added that banning people who already own another property and stopping applicants including a third party (other than a joint tenant) on their mortgage application “would help to make sure the scheme is genuinely helping people to become homeowners, not allowing them to become private landlords or to pass the property on to relatives”.

Gavin Smart of the CIH said: “Many rural communities are already at risk of becoming home only to wealthy or older people, with young people and people on lower incomes priced out.

“Exempting these communities from right-to-buy would help stem the loss of vital affordable housing. And when homes are sold under right-to-buy, we need to make sure they are going to people who have a right to benefit.” The proposals are outlined in the CIH’s budget submission, which also recommends a £100m fund to support vulnerable tenants and the removal of stamp duty for older homeowners receiving pension credit who choose to downsize to smaller properties.