News

11.06.18

Council’s ability to replace homes sold under Right to Buy will be ‘all but eliminated’ within five years

The current Right-to-Buy (RTB) scheme could collapse unless councils are granted more cash to replace the homes sold, a report has claimed.

The scheme, championed by Margaret Thatcher in the 1980s, allowed council house tenants to buy their home in an effort to increase home ownership around the UK. Yet the LGA has said that local authorities are running out of money to replace the housing.

According to the figures, over 60,000 properties have been sold to tenants over the last six years. But because the average sales price of the homes are half the market rate, councils only have enough funds to replace 14,000 of them.

“This leaves a shortfall of 46,000 homes which could have provided secure affordable housing for key workers, victims of domestic violence, veterans, people facing homelessness, and others in desperate need of a home they can afford,” the LGA said.

Two thirds of councils will have no chance of replacing homes sold under Right to Buy services on a one-for-one basis in five years’ time, unless “significant restructuring” of the scheme takes place.

Around 12,224 homes were sold under RTB last year. Based on the levels of sales remaining consistent, the analysis estimates that in 2023 councils would only be able to replace approximately 2,000 of these homes.

LGA analysis said that the number of homes sold off reveals that councils have lost enough homes to house the populations of Basingstoke, Worcester, or Lincoln.

Cllr Martin Tett, LGA housing spokesman, said: “We know that the Right to Buy changes 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.”

Tett said the government is now in a situation where “fundamental reform” is needed of the way the scheme is funded.

“Councils are closest to their communities and it’s essential this money is reinvested in homes in those areas so our residents can access secure, affordable housing. This money is badly needed to deliver homes for our residents – instead of resting in an account in Whitehall, it should be sent back to where it belongs,” Tett added.

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Image credit: allinvisuality

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