Right-to-Buy discounts have led to a ‘social housing fire sale’, say council leaders
By Steven Preece: Huge Right to Buy discounts are “driving up housing benefit spending” and exacerbating the homeless crisis, councils warn. The Government’s decision to increase the size of discounts available to people who wish to purchase their rented home has led to “a social housing fire sale”, council leaders have warned.
Analysis from the Local Government Association (LGA), which represents 370 councils in England and Wales, found the average discount offered to a council tenant purchasing their home through Right to Buy (RTB) has increased from £26,690 in 2011/12 to £61,810 in 2016/17.
Their research reveals that almost £3.5 billion in RTB discounts have been handed out to council tenants over the past six years.
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Councils warn this has led to a quadrupling in the number of RTB sales, while only around a fifth of these homes have been replaced.
Nearly 58,000 council homes were sold through the RTB system over the last six years.
Worryingly, there has been a 409% increase in RTB sales between 2011/12 to 2016/17 – the majority of which have not been replaced.
Under the current RTB system, councils are only allowed to keep a third of each RTB receipt. The LGA says the inability of councils to replace enough homes sold under RTB will make it more difficult for homeless people and vulnerable families to access affordable housing.
The LGA has called on the Government to allow councils to set discounts locally and keep 100% of sale receipts to replace homes, instead of that money going into the Treasury’s coffers.
Cllr Judith Blake, LGA Housing spokesperson, said: “Councils support people’s aspiration to own their own home and Right to Buy is one way of doing this.
“However, selling council homes at a discount of nearly half price had led to a social housing fire sale that threatens the future of the scheme. The rate of homes sold under RTB combined with the restrictions on councils is making replacing homes sold virtually impossible.
“This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis.
“This is particularly concerning as many of the homes sold through the scheme ended up being rented out privately at more expensive rates.”
“For RTB to work, councils must be able to replace every home sold.
“Councils must be allowed to set RTB discounts locally, retain RTB sale receipts in full to replace sold homes, and be given the freedom to borrow to build new affordable homes and play a lead role in tackling the country’s housing shortage.”