Treasury grabs £358m of Right to Buy receipts

Responding to a Freedom of Information act request, the government confirmed almost a quarter of the £1.54bn raised through 22,900 right to buy sales since 2012 has gone straight into Treasury coffers.

Only £588.3m was left for councils to build replacement homes, with a total of £929.4m used for other purposes.

When the government increased discounts to £75,000 per home in 2012, it promised any additional homes sold would be replaced on a one-for-one basis.

But so far only 4,800 replacement homes have been started, with many councils claiming they have insufficient funds to build.

Peter Box, housing spokesman for the Local Government Association, said: ‘The current right to buy arrangements… do not allow councils to replace homes sold on a like-for-like basis.

‘Councils should be able to retain 100 per cent of receipts to support new housing.’

Responding to the figures, the Chartered Institute of Housing (CIH) and the National Housing Federation (NHF) both called for a review of the way Right to Buy proceeds are used.

Catherine Ryder, head of Policy at the NHF, said: ‘The huge discounts on offer and the way the receipts are distributed, as illustrated by these findings, mean it is almost impossible to replace homes sold through Right to Buy.

‘If the Government is serious about meeting its commitment to replace homes sold, it must review the way total receipts from sales are used.’

Councils used £368.3m of the receipts to pay historic housing debt and £151.5m went into general funds. A further £12.7m was used to repurchase council homes previously sold under the policy, while £38.8m went on the administration of the scheme.

Gavin Smart, CIH deputy chief executive, called for the government to review the way receipts were distributed.

‘We’re concerned that in reality, one-for-one replacement of homes sold through Right to Buy is not happening,’ he said.

The figures also sparked divisions within the coalition, with Tim Farron, former party president of the Liberal Democrats, claiming the Conservatives were ‘blocking’ his party’s bid to allow councils to keep 100% of the receipts.  

The government uses a formula to project how much would have been raised had discounts not increased. Only the additional cash is used to fund replacement homes.  

Housing Minister Brandon Lewis said there were plans for a further 10,000 replacement homes funded through receipts.

‘This is in stark contrast to the years when right to buy was allowed to wither on the vine… while affordable house building plummeted,’ he said.