Government urged to let councils set Right to Buy discounts

8 Apr 15

Councils should be able to cut the discount available under the government’s Right to Buy scheme in order to raise funds to replace homes that are sold, housing organisations have said.

Setting out recommendations for the next government, the Local Government Association, Chartered Institute of Housing and the National Federation of ALMOs called for a more flexible approach to the flagship scheme.

The number of sales under the programme increased after the coalition government raised the level of discounts available to council house tenants in 2012 to £75,000. Around 11,260 homes were sold in 2013/14, almost double the previous year’s figure of 5,944.

However, a poll of 78 local authorities for today’s Keeping pace: Replacing Right to Buy sales report found they were only able to replace around half of the homes sold, as the money raised was not retained locally.

Under the current regime, the Treasury takes a proportion of receipts based on the projected volume of Right to Buy sales in each authority. Only once the forecast has been reached does the money then become available to build more homes, LGA chair David Sparks said.

As well as calling for councils to be able to retain all of the income from sales, he said that local authorities should gain the power to vary discount levels to ensure they can sustain the level of funding required to build replacement social housing.

‘There are millions of people on council waiting lists and local authorities want to get on with the job of building new homes that people in their areas desperately need,’ Sparks said.

‘That is why it is so important that councils have the power and funding to replace any homes sold under the Right to Buy quickly,’ he added. ‘The common sense answer to this housing crisis is for the government to allow councils to retain 100% of the receipts from Right To Buy directly and give councils greater flexibility over the level of discount and how they use them to replace the homes sold.’

CIH interim chief executive Gavin Smart added councils could replace many more homes if complex funding arrangements were changed.

By taking prompt action, the next government ‘can ensure that more social and affordable housing won’t be lost, which is vital for people on low incomes’, Smart stated.

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