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17.09.15

Failure to replace Right to Buy homes prompts call for shake-up

District councils have urged communities secretary Greg Clark MP to change “conflicting” housing policies, after new figures showed only one in eight properties sold under the Right to Buy scheme have been replaced in the last three years.

The District Councils’ Network (DCN) warned that Clark risks cutting the supply and quality of social housing across England if policies are not amended.

A survey of the DCN’s 200 members revealed yesterday (16 September) that only 376.5 new homes were built as replacement properties for more than 3,000 homes sold under Right to Buy between 2012-13 and 2014-15, indicating a replacement rate of just over 12%.

It also showed that policy changes have stalled over 3,500 properties in council-run schemes across 17 district areas, with plans for over 400 properties to be put on hold in three private, voluntary and independent sector (PVI) schemes.

Figures also showed districts would have to slash around 1,500 new builds to meet the immediate cash shortfall.

They argued that the results proved council purses would be hit harder than initially expected as a result of Summer Budget announcements to decrease housing rents by 1%. District councils are expecting to lose over £718m over the next four years.

District councils will therefore have to “steeply cut” new social housing spend by £210.8m to plug the predicted revenue gap, as well as cut back on capital improvements by £167.6m, on housing management by £25m, and on debt refinancing by £324.9m.

DCN chairman, Cllr Neil Clarke, said: “Ahead of the November Spending Review, ministers must act on an evidence base which strongly indicates a double bind of less funding for new housing stock and a shrinking availability of social homes, alongside the more rapid deterioration of remaining stock.

“Failure to reconsider the impact of these policies would have an impact upon thousands of hard-working families across who deserve the chance to either take a step on the property ladder or live in decent social housing where quality standards are maintained.”

The DCN analysis has also shown that revenue loss is calculated to top £11bn over the next 30 years as a result of massive long-term loans to fund and improve housing stock.

Yet the short-term figure is equally stark, with the network forecasting four-year losses of around £600m.

A DCN delegation, led by Clarke, met with the communities secretary and other officials yesterday (16 September) to discuss the findings and explore potential measures to mitigate the impact of current policies.

Cllr Clarke said: “Districts remain enthusiastic to deliver housing growth in the longer term for their communities. We hope to forge a way ahead with ministers on this issue, so that district councils can continue to play their full strategic role in delivering national housebuilding ambitions.

In July, PSE revealed that 1% cuts to social housing rents would cost councils £2.6bn by the end of this government, according to the LGA.

It said the funding gap would be over £1bn per year from 2020 onwards, representing 60% of local government’s total housing maintenance budget. The surplus spent by councils would equate to the cost of building almost 19,000 new homes.

The DCN also spoke out against the social housing outrage on the same month, saying district councils could be forced to scrap plans to build 42,000 new homes as a result of cuts.

(Top image c. Dominic Lipinski, PA Images)

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