Two thirds of councils will have no chance of replacing homes sold off under the Right-to-Buy scheme within the next five years, according to new research by the Local Government Association (LGA).
The LGA has today (11 June) published new figures which show around 60,000 homes have been sold off under the Right-to-Buy (RTB) scheme in the last six years.
The current system only allows council to keep a third of each RTB receipt to build a replacement home and the rest of the money goes direct to the Treasury.
Whitehall rules also prevent local authorities from borrowing to make up the shortfall.
According to the LGA, the rules around RTB have left councils with enough funding to build or buy just 14,000 new homes to replace those sold off in the last six year, leaving a shortfall of 46,000.
It now estimates two thirds of councils will have no chance of replacing homes sold off under RTB on a one-for-one basis in five years’ time unless the scheme is fundamentally changed.
The LGA is therefore calling for a comprehensive package of reform to the funding of Right to Buy, including allowing all councils to borrow to build new homes, enabling local authorities to keep 100 per cent of all sales receipts, and for councils to have the ability to set RTB discounts locally to reflect community needs.
The LGA’s housing spokesman, Cllr Martin Tett, warned the RTB scheme is ‘under threat’ unless it is reformed.
‘Councils urgently need funding to support the replacement of homes sold off under the scheme, or there’s a real chance they could be all but eliminated,’ said Cllr Tett.
‘Without a pipeline of new homes, future generations cannot benefit from the scheme.’
‘Enabling all councils to borrow to build and to keep 100 per cent of their Right to Buy receipts will be critical to delivering a renaissance in house building by councils. However, if we’re to truly make Right to Buy sustainable, we must also move towards greater flexibility on discounts locally so we can reflect local community need.
‘Councils are closest to their communities and it’s essential this money is reinvested in homes in those areas so our residents can access secure, affordable housing. This money is badly needed to deliver homes for our residents – instead of resting in an account in Whitehall, it should be sent back to where it belongs,’ added Cllr Tett.