Fears have been raised that homes sold under the British government’s flagship Right to Buy initiative in England will not be adequately replaced, prompting “drastic consequences” for future generations looking for an affordable place to live.
David Orr, chief executive of the National Housing Federation, has written a letter to Housing Minister Brandon Lewis which has been co-signed by 20 housing associations, calling for a radical overhaul of the initiative to ensure that homes sold under Right to Buy are replaced on a “like-for-like” basis.
The scheme was originally introduced in 1980 to give social tenants an opportunity to buy their council home at a discount and there has been an upswing in people buying homes under the scheme after it was reinvigorated in 2012.
The maximum discount is STG77,000 (about $A140,550) across England, except in London boroughs where it is STG102,700. The discounts offered are based on factors such as how long someone has been a tenant with a public sector landlord, the type of property they are buying and whether they have used Right to Buy in the past.
Receipts from Right to Buy sales are invested back into housebuilding. But the National Housing Federation said that while it supports the principle of home ownership which underlies Right to Buy, the “huge discounts” offered mean that housing associations are not receiving enough money from the sale of Right to Buy properties to build new homes to replace them.
It said it is even more difficult for housing associations to replace homes sold as the money from the sale is shared with the local authority as well as the Treasury.
In some cases the amount received by the housing association following the sale of a home under Right to Buy has been less than STG30,000.
With the average cost of building a new home exceeding STG140,000, the federation said it is concerned that homes sold will not be replaced, leaving a “lasting legacy on the availability of affordable homes in the future”.
It said that sales have shot up since new life was injected into the scheme in 2012, which led to larger discounts.
About 5,944 local authority homes were sold in the first year, and since then only STG3,634 replacement homes are complete or under way, the federation said.