Latest Public Sector News

04.05.16

Right to Buy extension could cost councils £26m a year in housing sell-off

The government’s Right to Buy extension could force councils to raise an average £26m a year by selling off council housing, Shelter has warned in a new report.

The Conservatives said in their election campaign last year that enacting the policy would cost £4.5bn a year, and the revised Housing and Planning Bill gives the secretary of state the power to demand that any council sell an as yet undefined proportion of their vacant stock.

Shelter calculated that this could be fulfilled by selling 23,503 council homes every year, six times more than previously estimated, at a cost of £26m.

Campbell Robb, Shelter’s chief executive, said: “With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.

“Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property. Ultimately, far more people will lose out and be left with no choice but expensive, unstable private renting.

“The government is out of touch on this issue, and running out of time to help the millions of ordinary people crying out for a home that they can actually afford.”

A recent Public Accounts Committee (PAC) report called the extension plans “entirely speculative” and financially unclear.

In an appearance before the House of Commons yesterday, housing and planning minister Brandon Lewis called it “rather surprising” that the PAC had reviewed the extension before it passed through the House of Commons and said that it would benefit 1.3 million people.

Meg Hillier MP, chair of the PAC, said that it was within the PAC’s remit to review policies before they become law to ensure that they offer taxpayers good value for money and called on Lewis to do more to protect social housing, particularly in London.

The LGA has previously warned that the Right to Buy extension will mean the loss of 80,000 council homes.

Shelter also warned that the burden would be unevenly distributed among councils, with those with the highest proportion of council homes worst hit because of the move from a flat rate to a relative threshold for household sales.

Birmingham would be the local authority losing the most, with sales of 1,190 homes a year at a cost of £145m, followed by Leeds with costs of £129m a year and Southwark with £122m.

 

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Comments

Simon Jenkins   10/05/2016 at 09:17

"power to demand that any council sell an as yet undefined proportion of their vacant stock" - why are local authorities holding vacant stock? Is this a typo, if not then what is the average time such stock is vacant and why is is vacant (e.g. repairs)?

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