7,000 council homes at risk from Right to Buy scheme

The government’s decision to extend Right to Buy to housing associations was included in the Housing and Planning Bill. An important part of the bill concerns the sale of vacant high-value council homes which could generate enough money to replace both the housing association and council houses sold, and set up a new £1 billion brownfield regeneration fund.

However, the CIH study shows that local authorities could be left with little money, unable to replace the homes they sell.

CIH chief executive Terrie Alafat said: “The government should examine how to close this funding gap in the forthcoming Spending Review, so that both housing associations and local authorities are able to replace the homes they sell with new affordable homes to rent.”

The research claims that between 2,100 and 6,800 ‘high-value’ council homes are likely to become empty and be sold each year – compared to the government’s estimate of 15,000. Those sales would generate between £1.2 billion and £2.2 billion a year – compared to the government’s estimate of £4.5 billion. Furthermore, around 1.45 million housing association tenants would be eligible for Right to Buy during the first five years of the policy, with around 10 per cent (145,000) likely to take advantage.

£1.2 billion would be around half the amount needed to compensate housing associations for homes sold under the scheme – housing associations would need almost all of the higher £2.2 billion estimate, leaving virtually nothing for councils to replace the homes they have sold or for the brownfield regeneration fund.

Alafat has warned that the government should consider how it can close the funding gap in the next Spending Review.

She said: “The government has said it wants to address our national housing crisis by driving up new house building so that we build one million new homes by 2020.

“But the combined impact of selling high value council homes and cutting affordable housing rents will make it virtually impossible for councils to play their part, as the government had originally planned.”

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