Councils forced to sell off enough homes to house Oxford

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 Oxford, Canterbury or Reading in the past five years.

The Local Government Association (LGA) is warning that Right to Buy (RTB) is under threat, and that the scheme will not work 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 rules and restrictions are also hampering the ability of councils to rapidly replace homes.

For this reason, 12,826 homes were sold off under the scheme in 2016/17, with councils only able to start 4,475 homes in replacement.

A total of 54,581 homes have been sold off since 2012 and just 12,472 replacement homes started, leaving a shortfall of over 42,000 - enough to house 168,000 people if each home included four family members. That is the 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 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. Over 250,000 homes a year are needed to solve the housing crisis. The last time this country hit that number, in the 1970s, councils built more than 40 per cent of new homes.

Martin Tett, 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.”