Right-to-buy hampers new housing delivery

August 11, 2016 / Isla MacFarlane
Right-to-buy hampers new housing delivery

Figures released by the Local Government Association (LGA) show that social housing is being sold off and not replaced, prompting calls to bring the scheme to an end.

The number of homes sold under Right to Buy (RTB) in England that councils have been able to start replacing fell by more than a quarter last year with national restrictions increasingly hampering their ability to build, the LGA warns.

Councils only keep a third of all receipts from sold RTB homes and further complex rules and restrictions mean councils are struggling to rapidly replace them.

The LGA said the current RTB scheme needs urgent reform to ensure councils are able to replace housing sold quickly and effectively. Councils need to be able to retain 100% of receipts from any council homes they sell and RTB discounts should be set locally to reflect local house prices.

Latest figures show 12,246 council homes were sold to tenants under RTB in England in 2015/16 but just 2,055 replacements were started by councils – a drop of 27% on the year before.

The LGA forecasts that 66,000 council homes will be sold to tenants under the existing RTB scheme by 2020 and fear councils will struggle to replace the majority of these homes.

Local government leaders warn this drop in the number of much needed council homes will exacerbate the housing crisis, increase homelessness and housing benefit spending – at a time when there are 1.4 million people on council housing waiting lists.

Council leaders are also calling on government to make the forced sale of high value council homes voluntary and to allow them to keep 100% of those receipts so that they can build new ones. The government should fund the extension of RTB policy by working with councils to build more homes on surplus public land.

Amid growing demand for affordable homes to buy and rent, this should be part of a wider ambition to allow councils to resume their historic role as a major builder of new homes in light of the economic uncertainty created by the UK’s decision to leave the European Union.

Cllr Nick Forbes, LGA Senior Vice Chair, said, “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.

“Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult. Such a loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.

Scotland has scrapped RTB, and Wales is looking at doing the same. Councils in England believe this policy can be made to work if they are able to build the replacements that protect essential local housing, and ensure future generations can also benefit from the scheme.

“If we are to stand a real chance of solving our housing crisis, 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, councils need to be able 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.”

In light of the gloomy figures, construction union UCATT has restated its call for an end to the right-to-buy scheme.

UCATT Acting General Secretary, Brian Rye, said, “This is social engineering of the most pernicious kind. We thought the era of the slum landlord had been banished forever. Millions of people in the latter half of the 20th century found safety, security and happiness living in social housing. That haven is being crushed by Tory social engineering as they seek to sell off our nation’s assets. It is utterly shameful and will have a lasting and detrimental impact on the fabric of this country.”

Rye added, “We welcome the stance of both the Scottish and Welsh Governments in banishing right-to-buy and call for all right-minded individuals in England to lobby to save our social housing. With every property sold the heritage and the heart of the British social housing safety net is further denuded and destroyed.”

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