The Housing Secretary has sparked controversy with his claim that it's more effective to spend taxpayer money on building new homes than indirectly supporting private landlords. Steve Reed made the comments at the Lloyds Social Housing Forum, criticising the current system where taxpayers are "subsidising" buy-to-let landlords through housing benefit payments on properties originally built with public funds.
Mr Reed pointed to the growing pressure on social housing, noting that over a million families are currently waiting for council homes. He also highlighted a significant near-doubling of the housing benefits bill since 2010 and warned that four in ten Right to Buy homes sold under the scheme are now rented out privately at high rents, with taxpayers footing the bill.
In response to these concerns, the government has announced reforms to the Right to Buy scheme. The minimum eligibility period for tenants to apply to buy their home will be extended from three to ten years, and initial discounts will be capped at 5% of the property's value, increasing by 1% annually up to a maximum of 15%. New-build social homes will also be exempt from Right to Buy sales for 35 years after completion.
Mr Reed outlined broader plans for the social housing sector, including a forthcoming consultation on extending the Right to Manage to housing association tenants. He also confirmed that the Decent Homes Standard will become a long-term regulatory requirement by 2035, mandating private and social landlords meet the standard.
The policy shifts come as the UK housing market continues to evolve. Despite a slight dip in average asking prices, house prices still stand at £375,110 on average, with regional variations driving stronger growth in some areas. Mortgage rates remain high, impacting affordability for both first-time buyers and those looking to remortgage.
The emphasis on building new homes rather than supporting private landlords reflects a strategic pivot in government housing policy aimed at addressing the chronic shortage of affordable housing and managing the burgeoning housing benefits bill.