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29.01.16

Right to Buy extension ‘means 80,000 council homes will not be replaced’

The extended Right to Buy scheme and Whitehall’s plans to sell high-value council homes to fund replacement homes will lead to a drop of at least 80,000 social rented homes, the LGA has said.

Council leaders estimate that 66,000 of these council homes will be sold to tenants under the Right to Buy scheme by the end of the decade, but “current complex rules and restrictions” will make it difficult for authorities to quickly replace the majority of these houses.

Local authorities could then be forced to sell a further 22,000 high-value homes to fund replacement houses and pay for the costs of extending the Right to Buy scheme to housing association tenants. This number could be higher depending on how Whitehall chooses to define ‘high-value’, the association said.

The figures come with a warning that due to £2.2bn cuts to housing budgets by 2020 as a result of cuts to social housing rent (deferred only for specialist homes), building replacements will be made “all but impossible”. The association estimated that around 80,000 of these 88,000 sold homes will not be replaced.

Instead of proceeding as planned, the LGA argued that the extension of the Right to Buy scheme to housing associations should not be funded by forcing councils to sell off social housing.

Instead, the government itself should fund the extension by giving councils the power to raise £13bn by building new homes on surplus public land, rather than through valuable home sales. Councils should retain 100% of receipts from any council homes they sell, with Right to Buy discounts set locally to accurately reflect house prices.

Cllr Peter Box, the LGA’s housing spokesman, said the organisation is keen to help the government shift spending “from benefits to bricks”, but argued existing plans will do the opposite, driving up the housing benefit bill by £210m by the end of the decade.

“With 68,000 people currently living in temporary accommodation, annual homelessness spending of at least £330m and more than a million more on council waiting lists it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve our housing crisis,” he said.

“There is a real risk that complex rules and restrictions will combine with certain aspects of the Housing and Planning Bill to have the unintended consequence of making building replacements almost impossible.”

In a wider ripple effect, this drop in replacement stock would hike rents across housing markets, making it harder for residents to pay for first-home deposits. It could also end up pushing families into the private market, Cllr Box claimed.

But the DCLG attacked the LGA’s claims, calling it “misleading and based on speculation”.

A spokesman for the department said: “More council housing has been built since 2010 than in the previous 13 years. More homes were built as a result of Right to Buy under the first year of the reinvigorated scheme, showing councils are delivering on their commitment to provide a new affordable property within three years.”

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