You are viewing 1 of your 1 free articles
Councils call for Right to Buy receipts flexibility amid crisis
Councils have demanded an extension to the time they have to spend money through Right to Buy sales before it returns to the government.
The Local Government Association (LGA) warned that the coronavirus means much-needed new social housing could go unbuilt unless ministers grant the extension.
Local authorities are only allowed to hold on to Right to Buy receipts for spending on replacement homes for three years until they have to give the cash back to the Treasury.
But the LGA said many councils are worried they will not have time to spend the cash with housebuilding delayed by the COVID-19 pandemic and called for the deadline to be extended to at least five years.
David Renard, housing spokesperson for the LGA and leader of Swindon Council, said: “The coronavirus crisis has understandably brought many developments and the creation of new homes to a standstill and is holding back councils from building and replacing much-needed social housing.
“Money generated through Right to Buy sales is vital in enabling councils to replace sold homes.
“Councils need more time to spend this money. This is critical if we are to get building again once the coronavirus pandemic passes and we begin the national recovery.”
READ MORE
Under the Right to Buy, council tenants can purchase their homes at discounts of up to £112,300.
Nearly 80,000 homes were sold through the policy between 2012/13 – when the discounts available were significantly hiked – and 2018/19.
Councils are expected to replace homes sold off on a one-for-one basis, but have only managed 21,720 over the same period, with the LGA blaming the fact they 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 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 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 no action was subsequently taken.
The Right to Buy has been banned in Scotland and Wales and is currently on hold in Northern Ireland during the coronavirus crisis.
Sign up for our Council Focus newsletter
Already have an account? Click here to manage your newsletters
