Councils to pay £26m annually for Right to Buy extension

According to housing charity Shelter, the government’s Right to Buy extension is likely to cost the average council in England £26 million per year to fund.

The move is part of the Housing and Planning Bill and will force councils to sell properties that become vacant on the open market. However, Shelter has estimated that the new policy could result in 23,500 council homes being sold off across the country in just one year.

The money raised from the sold homes would subsequently fund discounts to of up to £100,000 for housing association tenants taking up the Right to Buy.

The charity’s analysis estimated the value of council homes likely to become empty in each area and compared the figure to the £4.5 billion per year required to fund the extension of Right to Buy. The findings revealed that the average amount was around £26 million, with councils likely to be hit hardest.

In particular, Birmingham will need to raise £145 million each year from the sale of its council houses, while Leeds will have to raise £129 million. The research also warned that the Housing Bill will mean genuinely affordable homes would be sold and replaced by starter homes costing up £450,000 in London.

It added that some homes may not be replaced at all as only one home is being built for every eight which is sold.

Campbell Robb, chief executive of Shelter, said: “With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.

“Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their housing association property. Ultimately, far more people will lose out and be left with no choice but expensive, unstable private renting.

“The government is out of touch on this issue, and running out of time to help the millions of ordinary people crying out for a home that they can actually afford.”