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Government considering further extensions to Right to Buy receipts spending deadlines
Ministers are considering granting councils further extensions to the time they have to spend money raised through Right to Buy sales before it must be paid to the government.
In June, councils were offered a six-month extension to Right to Buy receipts deadlines in recognition of the fact that the COVID-19 crisis had slowed development.
Housing minister Christopher Pincher said in response to a parliamentary written question yesterday that the government is “currently looking into requests for further extensions and will inform authorities of the outcome as soon as possible”.
Local authorities are usually only allowed to hold on to Right to Buy receipts for spending on replacement homes for three years until they must hand the cash over to the Treasury.
The Local Government Association (LGA) had asked for this deadline to be extended for at least five years and pledged to push for more time after the six-month flexibility was granted.
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Responding to a question from Dan Poulter, Conservative MP for Central Suffolk and North Ipswich, Mr Pincher said: “To support local authority housebuilding during this unprecedented time, we extended the deadline for local authorities to spend receipts arising from sales of their homes by an additional six months.
“This has enabled many of them to catch up with their spending plans and deliver replacement social housing.
“We are currently looking into requests for further extensions and will inform authorities of the outcome as soon as possible.”
Under the Right to Buy, council tenants can purchase their homes at discounts of up to £112,300.
Latest official statistics show the government is 8,732 homes short of its own commitment for homes sold through the Right to Buy to be replaced within three years.
The LGA blames the lack of replacements on the fact that councils are only allowed to use a third of each receipt to spend on building new homes.
In 2018, Inside Housing revealed that less than half the £4.8bn raised through Right to Buy sales since 2012 had been put aside for replacement homes, with Treasury taking £920m and £1.1bn spent on repaying historic council debts.
The government published a consultation in August 2018 setting out proposals to offer councils greater flexibility over the use of Right to Buy receipts after admitting it was failing the one-for-one replacements pledge, but is yet to issue a response.
The Right to Buy has been banned in Scotland and Wales, while Northern Ireland’s government has indicated it will consult on scrapping the policy.
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