£3.5 Billion Right-To-Buy 'Firesale' threatens socially rented council housing

By James Moore, Oct 01, 2018 5:10

A housing estate under construction.

Liberal Democrats are warning that the number of homes still owned by Reading Borough Council is continuing to fall.

New analysis by the Local Government Association (LGA) reveals almost £3.5 billion in Right to Buy (RTB) discounts have been handed out to council tenants and sparked a social housing “firesale”.

The average discount has increased by 132 per cent to more than £60,000 in 2016/17 – selling properties at almost half price.

The current RTB system only allows councils to keep a third of each RTB receipt to build a replacement home and prevents local authorities from borrowing to make up the shortfall.

As a result, councils cannot replace the numbers of homes sold, impacting on their ability to provide housing for homeless and vulnerable families.

Local campaigner Ricky Duveen is asking for councils to be given the choice over whether to continue with RTB, and if they do, to set discounts locally and keep 100 per cent of sale receipts to replace homes.

Ricky said:

“In Reading 26 houses were sold from April 2016 to March 2017, with 47 sold the previous year."

“This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis. This is particularly concerning as many of the homes sold through the scheme ended up being rented out privately at more expensive rates.

“This cannot continue. Councils must be able to replace every home sold. Councils must be allowed retain Right to Buy sale receipts in full to replace sold homes, and be given the freedom to borrow to build new affordable homes and play a lead role in tackling the country’s housing shortage.”

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