WMN | Councillors call for right-to-buy scheme to be scrapped

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11 August 2016

Councillors call for right-to-buy scheme to be scrapped

By Kate LangstonPosted: August 11, 2016

(top right) Cllr Owen

Over the last three years, Devon and Cornwall councils have funded an average of just one new home for every four sold – despite a policy of one-for-one replacements.

Councillors claim this is because the scheme is unsustainable, and warn the problem will get worse if ministers plough ahead with plans to extend it.

Exeter City Council member and portfolio holder for housing, Keith Owen, accused the Government of failing to grasp “the seriousness of the situation”.

Cllr Keith Owen

“As a local housing authority, we are not in a position to replace anywhere near the number of council properties which are acquired by tenants under the right-to-buy scheme,” he said.

“And the situation in Exeter is generally no different than it is through the rest of the country.

“Its getting harder and harder to [replace homes], and its not going to be helped by recent Government legislation.

“The whole idea is badly thought through… I think it has to be scrapped.”

According to new figures from the Local Government Association, the rate at which councils in England replaced homes sold under right-to-buy (RTB) fell by more than a quarter last year.

Their data shows that while 12,246 council homes were sold to tenants in 2015/16, just 2,055 replacements were started by councils.

Government figures show that in Devon and Cornwall a total of 361 properties were sold under RTB between 2012/13 and 2015/16.

In that same three year period, councils only began the process of replacing 87 homes.

In the district of East Devon, the ratio of replacements to sales since 2012/13 has been 4.5 to one.

A spokesman for the council said it had been struggling to fund replacements “for a number of years”.

Right to buy figures for Devon and Cornwall (source: DCLG live sales tables)

“The receipt we receive from Right to Buy sales, after the statutory and significant discount is applied, is insufficient to purchase or build replacement units on a one for one basis,” he said.

“We have purchased and built some new homes over the past few years, but our ability… has been compromised by a recent Government requirement to reduce rents by 1% each year for the next four years.”

“This reduces our ability to finance new council homes as it eliminates any surpluses we have set aside for new affordable homes.”

Cllr Owen shares concerns about rent reductions, as and about plans to fund the extension of RTB to housing associations through the sale of council assets.

He said the forced sell-off of high-value social housing will see local authorities deprived of both the asset itself and income from rent.

“It’s a vicious circle,” he said. “Any money we’ve had in the past to build replacement council houses is not going to be there.

“There’s no sign the government understands the seriousness of the situation.”

A Government spokesman said there is a rolling three-year deadline for local authorities to deliver an additional home “and so far they have delivered well within their sales profile”.

“However, we have always been clear that if local authorities don’t start building replacement homes within the three-year deadline, then we will step in and build them for them,” he added.


What is right-to-buy?

Right-to-buy was introduced in 1980 under Margaret Thatcher’s government, as a means of boosting home ownership

It gives most council tenants the right to purchase their home from their landlord at a discount of up to 35% for a house, and 50% for a flat

Tenants can apply to buy if the property is their only or main home and self-contained, and they have had a public sector landlord for three years

If the property used to belong to the council, but has since been sold off, a tenant might still qualify for “preserved” right to buy

The Government is looking to extend right-to-buy to housing association properties, starting with a voluntary pilot scheme, through the Housing and Planning Bill

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