Thursday, 19 January 2017

Councils spend £27m of RTB funds buying back homes

Councils have spent almost £30m of cash raised through Right to Buy sales to buy back homes they were forced to sell at a discount under the same policy.

Figures released to Inside Housing under the Freedom of Information Act reveal for the first time the amount councils have spent on ‘buy back’ – repurchasing previously sold homes.

Of £1bn raised to provide replacement homes since 2012 under the Right to Buy scheme, £27.3m has been used for buy back, the figures show.

The Department for Communities and Local Government confirmed 66 councils have spent the cash purchasing an undisclosed number of homes at full market value.

John Bibby, chief executive of the Association for Retained Council Housing, said: “There are a number of authorities choosing to buy back properties.

“A lot of them see it as a cost effective means of increasing stock, and one that can be achieved within the three year time scale if they don’t have a development pipeline in place. It might also fit with existing estate management strategies.”

However, he added that other councils had decided not to use the cash to buy homes back, as they had “already given them away a public asset at a substantial discount” and did not want to pay full value to buy them back.  The Right to Buy has offered tenants boosted discounts of £103,400 in London since 2013 and £77,900 in the rest of England since 2012.

Councils retain a portion of the receipts to replace additional homes sold as a result of the increased discounts, and have so far started 4,000 replacements with 35,000 sold for £2.3bn. Alongside the £1bn for replacements, £500m has been kept by the Treasury and £500m used to repay debt.  

Since the Right to Buy scheme was first introduced in 1980, more than 1.9m council homes have been sold across England.

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