It sounds to me as though the government is kicking Right to Buy into the long grass. It was a manifesto commitment to roll it out across the country but it isn’t going to do that now because it is nervous about the cost.
An extension of Right to Buy to housing association tenants forms part of the new Housing and Planning Act, which will oblige Councils to dispose of vacant stock – and higher-value properties in particular – on a sell-and-replace basis.
Right to Buy does not seem to be helping to reduce shortages as fewer homes have been built than sold under the scheme, which began in 1980.
To date, councils have started replacing only one in six homes sold in England over the past year, according to the Local Government Association (LGA). 12,250 were sold to tenants whereas work started on 2,050, which is down 27 per cent on the previous 12 months.
This discrepancy is only exacerbating the problems, increasing homelessness and spending on housing benefit at a time when 1.4 million people are on council house waiting lists.
Nor is there any guarantee that the sale of higher-value properties with which local authorities are supposed to fund the extension of Right to Buy for up to 1.3 million housing association tenants, will be replaced on a one-for-one basis – or even in the same areas.
In my opinion, receipts should be ring-fenced to fund a rented property replacement and not used as a local authority revenue generation tool.
Councils also want to replace homes sold off under Right to Buy. At present, local authorities are only allowed to keep 30 per cent of the cost for replacing Council homes so cannot build replacements as they’re unable to borrow the remainder.
For example, 22,000 social housing dwellings were sold in 2015/16 – 12,000 by local authorities and 9,400 by housing associations representing 0.5 per cent of the total social housing stock.
DCLG reported 7,000 starts and acquisitions in June 2016 which is greater than one-for-one i.e. 4,300 sales since the scheme was refreshed in 2012.