The Chancellor will cut back Right to Buy discounts as part of next week’s Budget to boost council housing supply.
Rachel Reeves will announce plans to consult on a new five-year social housing rent settlement and to reduce Right to Buy, which allows tenants renting local authority-owned homes to buy them at a discounted rate, in order to protect existing council stock and keep council homes in the sector.
The moves are part of a housing package that includes £500m in new funding for up to 5,000 new affordable social homes and £128m to support delivering 33,000 new homes through projects across the country.
Reeves said: “We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.
“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5m new homes we so badly need.”
The government will seek to cap what social housing providers can charge tenants in line with Consumer Price Index inflation plus one per cent, launching a consultation on a five-year social housing rent settlement.
The consultation will also ask for views on other options, such as providing a 10-year settlement.
The government is also planning greater protections for newly-built social housing and to allow councils to keep 100 per cent of the money raised from Right to Buy sales so they can build and buy more social housing.
A housing strategy will be set out in the spring and details of new investment to succeed the 2021-26 affordable homes programme will be set out in the next spending review.
The £500m top-up in funding for the affordable homes programme brings total investment in housing supply to more than £5bn, the Treasury said.
Deputy Prime Minister Angela Rayner said: “We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford.
“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”
Press Association – Helen Corbett