100,000 homes are likely to be sold through the RTB scheme by 2030, with just 43,000 replaced as significant discounts leave councils without funding to replace the much-needed homes on a like-for-like basis.
England’s already stretched social housing stock is predicted to lose a further 57,000 homes through the Right to Buy (RTB) scheme by the end of the decade as councils struggle to replace sold properties, new analysis published by the Local Government Association reveals.
A new report by Savills, commissioned by the LGA, Association of Retained Council Housing (ARCH) and National Federation of ALMOs, estimates that 100,000 homes are likely to be sold through the RTB scheme by 2030, with just 43,000 replaced as significant discounts leave councils without funding to replace the much-needed homes on a like-for-like basis.
The analysis warns that there will be no region of the country or local authority with the capability to provide one for one replacements of homes sold under RTB over this period.
The size of the discounts available were increased in April 2012, and as a result the average discount has increased by 150 per cent to nearly £68,000 in 2021/22. At the same time, this has led to a quadrupling in the number of RTB Sales.
With RTB discounts set to increase by a further 10.1 per cent from April this year, in line with September’s rate of inflation, the LGA says it will become even harder for councils to deliver replacements.
The LGA is urging the Government to use the Spring Budget to allow councils to set discounts locally and retain 100 per cent of sales receipts to avoid such a loss of desperately-needed social housing stock.
Councils also need to be able to combine RTB receipts with government grant funding, such as the Affordable Homes Programme, and transfer funding from sales to ALMOs or housing companies to give them greater flexibility over how new council housing is delivered.
Cllr David Renard, housing spokesperson for the LGA, said:
“Councils want to urgently help people on council housing waiting lists and stuck in temporary accommodation.
“It is becoming impossible for councils to replace homes as quickly as they’re being sold as they are being left with nowhere near enough money to provide replacements. Rising RTB discounts mean that one household’s home ownership is increasingly being prioritised over another’s access to secure, safe, social housing.
“RTB can enable families to get on the housing ladder and own their own home, but every home sold that isn’t replaced risks pushing more families into the private rented sector, driving up housing benefit spending and rents, along with exacerbating our homelessness crisis.
“Our new analysis shows RTB will quickly become a thing of the past in England if councils continue to be prevented from replacing sold homes. Councils urgently 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.”
Notes to editors
Research published by the LGA found:
- 94 authorities collect receipts that are below 30% of replacement costs. Only 30 authorities collect receipts that are in excess of 40% of replacement costs.
- Total sales projected over the period from 2021 to 2030 are projected to be in the region of 100,000, whilst total replacements are unlikely to be much above 43,000, representing net stock loss of 3.61% across the country over that period.
- The gross level of discounts offered since 2012 substantially outweigh the rent likely to have been paid by those tenants who purchased their properties in that period, perhaps by up to £2 billion.
Research into the Right to Buy within the Housing Revenue Account report - Available on request