Almost £6 billion has been given out in discounts through the
Right to Buy (RTB) scheme since the size of the discount was
increased in 2012, new analysis by the Local Government
Association reveals.
The LGA, which represents more than 350 councils in England and
Wales, warns that the scheme is becoming unsustainable, with
councils struggling to rebuild homes as quickly as they are being
sold.
The size of the discounts available were increased in April 2012,
and as a result the average discount has increased by 150 per
cent to more than £67,000 in 2020/21. At the same time, this has
led to a quadrupling in the number of Right to Buy Sales.
Councils are also not able to keep all of the money from RTB
sales. This means that they have only been able to replace around
a third of homes sold since 2012, impacting on their ability to
provide housing for homeless and vulnerable families.
While Right to Buy has helped many families get on the housing
ladder, the LGA said the scheme faces an uncertain future unless
councils are given the flexibility to set discounts locally and
retain 100 per cent of sales receipts to fund the replacement of
homes sold off under the scheme.
Councils also need to be able to combine RTB receipts with
government grant funding, such as the Affordable Homes Programme,
and transfer funding from sales to ALMOs or housing companies to
give them greater flexibility over how new council housing is
delivered.
Cllr David Renard, housing spokesperson for the LGA, said:
“Councils want to urgently address the number of people on
waiting lists for a council home and stuck in temporary
accommodation. At a time of an escalating cost of living crisis,
we urgently need to build more council homes, not have less.
“It is becoming impossible for councils to replace homes as
quickly as they’re being sold and they are increasingly having to
do so with far less money than the property sells for because of
discounts being offered.
“Every home sold that isn’t replaced risks pushing more families
into the private rented sector, driving up housing benefit
spending and rents and exacerbating our homelessness crisis.
“Right to Buy continues to enable many families to achieve their
dream of getting on the housing ladder and owning their own home.
However, without reform of the scheme, future generations will
not enjoy the same opportunity.”
Notes to editors
Right to Buy
statistics
LGA analysis reveals:
- In 2011/12, the average discount for a council tenant
purchasing under RTB was £26,690 – around 27 per cent of average
property value – rising to £67,050 – 42 per cent of property
value – in 2020/21
- Since 2012, councils have sold 96,126 homes under the Right
to Buy Scheme and started building 32,901 homes. Assuming all
starts are completed this would equal a loss of around 63,225
social rented homes.
Right to Buy enables most council tenants to buy their council
home at a hefty discount of up to £87,200 (£116,200 in London)
and on top of this councils also have to return a proportion of
the remaining money from the Right to Buy sale to the Treasury.
The Government also announced a proposed extension of the scheme
in May, which would mean 2.5 million housing association tenants
would also be able to access discounts when purchasing their
home.
