Housing associations and other social housing providers have bowed to government pressure and voted in favour of making a voluntary deal to extend the government’s Right to Buy policy.
On 2 October, the housing associations removed their opposition to the deal on the basis that they would be able to opt out of offering it to tenants if they had a good reason to do so.
The Local Government Association said it was “disappointed” that the National Housing Federation had sought to “secretly” strike a deal with the government.
In September, the government and National Housing Federation negotiated a deal whereby housing associations would voluntarily sell their properties to tenants who wanted to buy.
Last week, former business secretary Vince Cable lambasted the government’s proposal to extend the right-to-buy programme to housing association tenants, which was announced in the July Budget.
Speaking at the Association of Short Term Lenders’ Conference in London on 1 October, he said: “One of my main gripes with this government is the damage they are potentially doing to housing associations. The proposal to extend right-to-buy will cripple them.
“They will not be able to replenish their stock and will lose their independent borrowing capacity, and reduce the supply of social housing. We need more housing association and council homes.”
However, Mr Cable welcomed government intervention in the buy-to-let space to cut tax relief.
He said it had represented substantial risk to the housing market and given preferential treatment to private landlords, rather than to prospective owners.
“There is absolutely no justification for giving preferential treatment to buy-to-let borrowers, as opposed to borrowing for other forms of investment,” he said.
“It is now being reduced to the standard rate and I would be surprised if it is not tightened up further.”
Peter Gettins, product manager at Bath-based London and Country Mortgages, said: “First-time buyers say it makes it harder for them, while BTL investors say it is a business and they are providing a service that is in demand so they should be able to offset incidental costs against business they bring in. It will however really change the dynamics for BTL investors who are high-rate taxpayers.”