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RTB restrictions force councils to sell off enough homes to house Oxford

The Right to Buy (RTB) scheme will “grind to a halt” if local authorities are not given more financial powers in the upcoming Autumn Budget, the LGA has warned.

Currently, councils can only keep a third of receipts from homes sold under RTB and are prevented from borrowing to make up the shortfall.

Consequently, just one third of homes sold under RTB are replaced, resulting in enough affordable homes to house the entire population of Oxford being sold off in the past five years.

In 2016-17, almost 13,000 homes were sold under the scheme, with the building of only 4,475 replacement homes started. And since 2012, over 54,500 homes have been sold off, representing a shortfall of 42,109 replacement homes – enough to house 168,000 people if each home contained a family of four, a population equivalent to the entire city of Oxford, Reading or Canterbury.

The LGA is calling on the government to allow councils to retain 100% of receipts from RTB sales and have more freedom to invest and set rents.

It claims that the country needs 250,000 new homes a year to solve the housing shortage. But the last time that figure was reached, back in the 1970s, councils built 40% of new homes. Currently, only 8% of councils build enough affordable housing.

Cllr Matin Tett, housing spokesman for the LGA, said that families “desperately need” affordable homes and more routes to buy homes.

“Current RTB arrangements are restricting councils from being able to replace homes being sold under the scheme,” he continued. “RTB will quickly become a thing of the past in England if councils continue to be prevented from building new homes and replacing those sold.

“If we are to stand a real chance of solving our housing shortage, councils need the funding and powers to replace any homes sold under RTB quickly and reinvest in building more of the genuine affordable homes our communities desperately need.

“Alongside the ability to borrow to invest in housing, the Autumn Budget needs to hand councils the ability to retain 100% of receipts from sales, combine those receipts with other funding to build replacements and set RTB discounts locally so they reflect the cost of houses in the area.”

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