Councils struggle to replace sold-off homes

Local authorities are struggling to replace council houses sold through the Right To Buy programme of sales to tenants because the proceeds do not cover the cost of building new properties.

Nearly three-quarters of councils can afford to replace less than half the homes they sell, according to the Local Government Association, the Chartered Institute of Housing and the National Federation of Almos (arm's-length management organisations).

But their survey of 78 councils found 12 per cent could not afford to build any homes at all.

Right To Buy allows council tenants to buy their home at a discount to its market value. More than 2m council-owned homes in the UK have been transferred to private hands since the policy was launched by Margaret Thatcher in 1980.

Sales volumes have risen since the coalition government came to power because it increased the discount offered to tenants.

More than 11,000 homes were sold under the scheme in 2013-14 - almost double the number in the previous year.

A proportion of the cash raised goes to central government, leaving local councils with only part of the money they need to build a home to replace each one they sell. In 2013-14 councils received £305m from total sales proceeds of £751m, according to the Local Government Association.

As a result, the number of social homes is falling.

David Sparks, LGA chairman, called on the government to allow councils to keep all the cash raised from sales and give them more flexibility about the discount they can offer.

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"That is why it is so important that councils have the power and funding to replace any homes sold under the Right to Buy quickly."

The Conservative party wants to extend the policy to housing associations - private, not-for-profit landlords - but has faced opposition from some social landlords.

Gavin Smart, CIH interim chief executive, said replacing Right To Buy homes was "vital for people on low incomes".

"Right to Buy has helped millions of people become homeowners, but there are many more who remain in housing need," he said. "It is crucial that every home sold is replaced."

Westminster Council last month announced it will spend £20m to buy back 45 former council homes that had been sold to tenants under the Right To Buy. Families in the area face an eight-year wait to be housed, according to the council.

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