Intrinsic issues with Right to Buy could affect wider housing market

Intrinsic issues with Right to Buy

Commenting on news today that the communities and local government select committee has reported concerns around the Government’s Right to Buy policy, Chris Wilson, head of social housing at KPMG, said:

Also on KPMG.com

Commenting on news today that the communities and local government select committee has reported concerns around the Government’s Right to Buy policy, Chris Wilson, head of social housing at KPMG, said:

“The concerns made by the committee on Right to Buy are very valid and we can only hope will be seriously considered by Government. Since the announcement of the new Right to Buy for housing associations, it seems more and more issues have been uncovered. The levy on councils is undoubtedly a major issue – forcing sales of high value properties won’t just affect councils now, but will cause huge issues in the future because those remaining are likely to be properties with the greatest need for maintenance, taking more money from councils’ housing budgets.

“But that’s not the only problem. The intrinsic issue with the Right to Buy extension is the need for at least one for one replacements. When the policy was announced, concerns were raised that replacement build costs are likely to be higher than sale receipts in some areas, due to the level of Right to Buy discount – this concern has not been remedied. Added to that is the time lapse between a property sale and a new home being available – when availability of land, pricing and build costs are taken into account, the gap could be a couple of years.

“Added to all the above is the fact that the committee’s concerns raise the valid point that without safeguards, properties bought under Right to Buy could quickly find themselves on the buy to let market, directly contradicting the Government’s recent moves to restrict its growth through stamp duty changes.

We must see solutions to these concerns put in place – the idea of Right to Buy is to give more people access to an affordable home that they can own, but that cannot be to the detriment of the wider housing market and the many others who need a roof over their head, whether rented or owned.”

ENDS

Notes to editors:

For press enquiries please contact:

Frances Shennan, Corporate Communications at KPMG

T: +44 (0)121 335 2575

E: frances.shennan@kpmg.co.uk

Follow us on twitter: @kpmguk

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such

Connect with us

 

Request for proposal

 

Submit

KPMG’s new-look website

KPMG’s new-look website