Councils call for reform of right to buy so they can build more homes

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COUNCILS are calling for the Government to change the rules on right to buy so that they can build more homes.

The Local Government Association (LGA), which represents councils in England and Wales, says that the system currently undermines local authority efforts to deliver more homes and has urged the Government to introduce reforms in next month’s spending round.

According to the LGA, councils in England directly built 2,560 homes in 2018/19 — the most since 1992/3 when they built 2,580 homes.

Last year the Government acted on the LGA’s call to give councils the freedom to borrow to build new homes by lifting the housing borrowing cap; something that had long been argued was a key barrier in local authority housebuilding.

Council leaders are now calling on the Government go further and use next month’s spending round to reform the scheme, which the LGA says is restricting councils from replacing homes sold.

“Councils are trying to build the new homes with the right infrastructure that our communities desperately need,” said Councillor Judith Blake, the LGA’s housing spokesperson. “However, the number of new council homes being built is not able to keep pace with those sold under right to buy.”

Since 2011/12, figures reveal that:

  • Councils have only been able to replace nearly a fifth of homes sold, impacting on their ability to provide housing for homeless and vulnerable families
  • Councils have seen an increase of nearly 350% in right to buy sales of council homes, from 2,638 in 2011/12 to 11,833 in 2017/18. This has amounted to a total of nearly 70,000 council homes sold under the discount scheme in seven years. With councils only building 11,300 in that time this equals a loss of around 58,000 social rented homes over that period

Currently councils retain a third of receipts from right to buy sales, with the rest kept by the Treasury. The LGA said councils need to be able to keep 100% of Right to Buy receipts and set discounts locally.

This would allow them to replace the social rented homes sold which would help avoid families being pushed into the private rented sector, reduce homeless and housing benefit and enable people to save up for their own home.

“Right to buy continues to enable many families to achieve the dream of getting on the housing ladder and owning their own home, but it urgently needs reform,” Blake added. “Current arrangements are restricting councils from being able to replace homes being sold under the scheme.

“This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis.

“There are more than a million people on council waiting lists and councils can further get on with the job of building the new homes that people in their areas desperately need if they are able to keep all RTB receipts to replace any homes sold.”



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