Right to Buy scheme under threat unless councils receive funds to build more social housing

Right to Buy scheme under threat unless councils get funds for social housing

Monday, June 11, 2018

The Government's Right to Buy scheme is under threat unless councils are given more funds to replace homes sold under the programme, a report warns.

The Local Government Association (LGA) said more than 60,000 houses have been sold under the scheme in the past six years, with average prices of half the market rate, leaving local authorities with enough money to build or buy just 14,000 homes to replace them.

Figures from the Department of Communities and Local Government showed 1.87 million homes were sold under the scheme between 1980 and 2013.

Between 1993 and 1996, amost 60,000 new homes for social rent were provided each year - this has fallen to just over 5,000 per year, figures from Full Fact show.

'Affordable rented' properties were introduced in 2011. These are let by either local authorities or private registered providers of social housing, rather than being owned by local authorities as in the case of social housing. 

Around 24,000 of these were built in 2017.

Research for the LGA showed that two thirds of councils in England will have no chance of replacing the same number of homes sold off under Right to Buy in five years' time without "significant" restructuring of the scheme.

Around 12,224 houses were sold under the scheme last year, but the study showed that by 2023, councils would only be able to replace 2,000 of them.

Rules including a significant portion of all receipts being handed over to the Treasury rather than the communities in which the homes are sold are hampering the ability of local authorities to reinvest in housing, said the LGA.

Martin Tett, the LGA's housing spokesman, said: "We know that the right to buychanges lives - it helps people who otherwise wouldn't be able to get on the ladder experience the security and independence of home ownership. It is essential that it continues to do so.

"However, we are now in a situation where without fundamental reform of the way the scheme is funded, this vital stepping stone into home ownership is under threat.

"Councils urgently need funding to support the replacement of homes sold off under the scheme, or there's a real chance they could be all but eliminated. Without a pipeline of new homes, future generations cannot benefit from the scheme.

"Enabling all councils to borrow to build and to keep 100% of their Right to Buy receipts will be critical to delivering a renaissance in house building by councils."

A Communities and Local Government Department spokesman said: "This Government remains committed to helping people get a foot on the housing ladder through the Right to Buy scheme.

"We will be consulting local authorities in the coming months on ways to increase their flexibility to replace homes sold, and will announce further details in due course."