Councils are only able to replace a third of homes currently
being sold under the Right to Buy, forcing them to sell off
enough affordable homes to house the population of a city the
size of Reading, Canterbury or Oxford in the past five years.
The Local Government Association is warning that Right to Buy
(RTB) itself is under threat, and that the scheme will grind to a
halt if local authorities are not given the financial powers to
replace sold homes and embark on a renaissance in council house
building.
Councils are only allowed to keep a third of all receipts from
sold RTB homes and are prevented from borrowing to make up the
shortfall. Further complex rules and restrictions are also
hampering the ability of councils to rapidly replace homes.
As a result 12,826 homes were sold off under the scheme in
2016/17, with councils only able to start 4,475 homes in
replacement.
Since 2012, a total of 54,581 homes have been sold off and just
12,472 replacement homes started, leaving a shortfall of 42,109
homes – enough to house 168,000 people if each home included four
family members.
That is equivalent to the population of Reading, Canterbury or
Oxford.
The LGA is calling on government to use the Autumn Budget to
allow councils to retain 100 per cent of Right to Buy sales
receipts and have more freedom to borrow to invest and to set
rents, as well as the flexibility to determine how they implement
Right to Buy locally.
This should be part of a wider ambition to allow councils to
resume their historic role as a major builder of new affordable
homes. More than 250,000 homes a year are needed to solve our
housing shortage. The last time this country hit that number, in
the 1970s, councils built more than 40 per cent of new homes.
Cllr Martin Tett, the LGA’s Housing Spokesman, said:
“Families around the country desperately need more affordable
homes and more routes into home-ownership. A model of Right to
Buy that actually allows councils to build more homes would
vastly increase the opportunities for these families.
“Current RTB arrangements are restricting councils from being
able to replace homes being sold under the scheme. 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 per cent
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.”
NOTES TO EDITORS
- Right to Buy sales and replacement home starts data can be
found here.
-
DCLG’s Housebuilding
statistics reveal that there were 161,230 new homes
built in 2016/7.
- City population sizes are based on the latest ONS Population
Estimates. The city of Reading has a population of
162,700, according to the Office of National Statistics’ latest
estimates. Oxford has a population of 161,300 and Canterbury’s
population is approximately 162,400, meaning councils would not
only be able to provide enough homes for Reading, but also
nearly 3,000 extra homes accommodating 11,640 more people.
- LGA analysis took the amount of homes sold in the last five
years (54,581) and subtracted the number started in replacement
(12,472). Multiplying the shortfall (43,585) by 4, assuming an
average family of 2 adults and 2 children live in each home
determines councils sold off enough homes to house 168,436
people. According to government
statistics, 40 per cent of families with dependent children
have two children.
5. The LGA’s Autumn Budget
submission includes proposals for how giving councils
powers and access to funding could spark a renaissance in council
housebuilding.
