Following the announcement on 30 July 2024 by the Deputy Prime Minister, as part of the announcement in Parliament on housing and planning (https://questions-statements.parliament.uk/written-statements/detail/2024-07-30/hcws48), Local Authorities have received a letter setting out further details on the flexibilities on the use of Right to Buy (RTB) 1-4-1 receipts.
A review of the increased discounts for RTB introduced in 2012 is underway with changes expected to be implemented in the autumn. The policy is being reviewed on a wider scale and consultation is also planned for autumn.
The key changes apply to expenditure on new build and acquisitions of affordable homes over the two financial years 2024/25 and 2025/26, but relates to unspent receipts that have been generated since 2019/20:
The maximum permitted contribution from Right to Buy (1-4-1) receipts to replacement affordable housing will increase from 50% to 100%
RTB (1-4-1) Receipts will be permitted to be used with section 106 contributions
The cap on the percentage of replacements delivered as acquisitions each year (currently 50%) will be lifted.
The flexibilities will be in place for an initial 24 months, subject to review.
There is no change to the requirement to return unspent RTB 1-4-1 Receipts after 5 years. The Government is encouraging local authorities to make the best use of these flexibilities to maximise RTB replacements.
Abovo’s HRA Business Plan model Fortress (V24) does not require any amendments to cater for these changes and is fully flexible in its own right to take account of how this may change decision making.
For any queries relating to this, please contact your usual Abovo-Consult adviser.
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