Right to buy likely to fail says report
The government’s attempt to re-ignite right to buy sales by increasing the discounts available to tenants will fail to deliver the promise of one for one replacements, according to a property analyst.
Hometrack’s review of government proposals found that the discount levels proposed by the Communities and Local Government department would require there to be 1.4 sales to fund every replacement home. The report backs up claims made when the consultation was launched in December.
The analysis found that projected receipts from right to buy sales with the new discounts factored in would be around £64,000, which is less than the cost of delivering a new property. In London, 1.6 sales would be required to provide a replacement, while the figure fell to 1.1 in the north west.
Hometrack also cast doubt on the affordability of the plans. The government has proposed that the discount available to tenants should be raised to 50 per cent, but capped at £50,000. Hometrack claims that the limit on discounts will see a limited take up, especially in the capital where it says a discount of £128,000 would be required to make right to buy viable.
Richard Donnell, director of research at Hometrack, said: ‘A higher discount is likely to see an increase in RTB sales but the real challenge will be ensuring a one-for-one replacement at a time when the pressure is to grow the overall stock of affordable housing.’
A CLG consultation on the new right to buy proposals was due to come to an end today (2 February).