Councils demand reform of right to buy rules

12 Jun 18

Only one third of councils will be able to replace homes sold under the right to buy scheme in five years’ time, council leaders have warned.

In the last six years more than 60,000 homes have been sold under the initiative at an average of half the market rate, leaving councils with funding to build just 14,000 new homes, the Local Government Association said in a report out yesterday

The LGA has called for “fundamental reform” of the scheme and for councils to be allowed to borrow in order to build new homes.

Martin Tett, LGA housing spokesman, said: “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.

“Enabling all councils to borrow to build and to keep 11% of the right to buy receipts will be critical to delivering a renaissance in housebuilding by councils.

“However, if we’re to truly make right to buy sustainable, we must also move towards greater flexibility on discounts locally so we can reflect local community need.”

The report, commissioned by the LGA and produced by Savills, found that in the last year alone 12,224 homes were sold under RTB but, based on the current level of sales and borrowing restrictions, by 2023 councils would only replace 2,000 of these.

Steve Partridge, a director at Savills Housing Consultancy and author of the report, The Sustainability of the Right to Buy, said that given “unrestricted access” to matched funding alongside receipts, local authorities could build 1.3 homes for every  1 sold under RTB.

“That would be around 16,000 homes against annual right to buy sales of around 12,200 homes,” he said.

Partridge added: “The government programme for lifting borrowing headroom announced in the Budget and shortly to be consulted on is a very useful first step and will be seen as a welcome opportunity for many authorities to achieve a bigger replacement programme.”

A spokesman for the Ministry of Housing, Communities and Local Government 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.”

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