The Local Government Association, which represents more than 350 councils in England and Wales, has warned that the Right to Buy (RTB) scheme is becoming unsustainable, with councils struggling to rebuild homes as quickly as they are being sold.
Almost £6 billion has been given out in discounts through the RTB scheme since the size of the discount was increased in 2012, new analysis by the LGA reveals.
The size of the discounts available were increased in April 2012, and as a result the average discount has increased by 150 per cent to more than £67,000 in 2020/21. At the same time, this has led to a quadrupling in the number of Right to Buy Sales.
Councils are also not able to keep all of the money from RTB sales. This means that they have only been able to replace around a third of homes sold since 2012, impacting on their ability to provide housing for homeless and vulnerable families.
While Right to Buy has helped many families get on the housing ladder, the LGA said the scheme faces an uncertain future unless councils are given the flexibility to set discounts locally and retain 100% of sales receipts to fund the replacement of homes sold off under the scheme.
“Right to Buy continues to enable many families to achieve their dream of getting on the housing ladder and owning their own home”, said Cllr David Renard, housing spokesperson for the LGA. “However, without reform of the scheme, future generations will not enjoy the same opportunity.”
The LGA said that councils also need to be able to combine RTB receipts with government grant funding, such as the Affordable Homes Programme, and transfer funding from sales to ALMOs or housing companies to give them greater flexibility over how new council housing is delivered.
Renard continued:
“Councils want to urgently address the number of people on waiting lists for a council home and stuck in temporary accommodation. At a time of an escalating cost of living crisis, we urgently need to build more council homes, not have less.
It is becoming impossible for councils to replace homes as quickly as they’re being sold and they are increasingly having to do so with far less money than the property sells for because of discounts being offered.
Every home sold that isn’t replaced risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis.”
One Response
Right to buy has distorted the housing market by enabling a small part of the population to enjoy a financial windfall at the expense of everybody else. More than 40% of ex right-to-buys are no longer in owner occupation, forcing councils to rent back on their own estates to meet their statutory housing obligations, pricing out both first time buyers and private renters by putting them in competition with cash-rich buy-to-let. The inability of councils to meet their statutory housing responsibilities from their own stock is the root cause of Britain’s hosing crisis.