One of the valid criticisms of the original Right-to-Buy policy was that it achieved little penetration of owner-occupiers in to inner city estates. Indeed, many homes which were bought on such estates were rapidly re-let by their new owners, often to those claiming Housing Benefit. As we embark on a new wave of Right-to-Buy, we must ensure that any homes bought at a discount are not immediately re-cycled back in to the lettings market and rented to people claiming Housing Benefit.
This is consistent with the “claw-back” provisions which were and presumably still will be included in any Right-to-Buy sales. These protected the taxpayer from buyers immediately re-selling their homes for a profit and cashing in on the discount given to them by the taxpayer. Similar protection against letting the properties needs to be included.
One simple way of protecting the taxpayer would be to set up a register of properties bought under Right-to-Buy which Local Authorities would be obliged to check before giving people Housing Benefit. If the property they hope to rent is on there, then no benefits would be payable. This restriction ought to be in place for a minimum of three years.
It would be less easy to protect against new owners letting their properties to private tenants at market rents without Housing Benefit support, but the taxpayer would then at least be getting a return through the tax paid on any profit by the landlord. However, there is a need to protect against those new owners who do rent out their properties, re-cycling themselves as new tenants claiming Housing Benefit.
So anybody who does take advantage of the new Right-to-Buy offer really should be “red-flagged” in both the benefit and the tax system to make sure they play by the rules with what is a very generous offer from the taxpayer!