Almost £6 billion has been given out in discounts through the Right to Buy scheme since the size of the discount was increased in 2012, leaving councils in England struggling to rebuild homes as quickly as they are being sold.
The size of the discounts available were increased in April 2012, and as a result the average increased by 150 per cent to more than £67,000 in 2020/21. At the same time, this has led to a quadrupling in the number of Right to Buy (RTB) sales.
Councils are also not able to keep all of the money from RTB sales, and cannot combine RTB receipts with government grant funding, such as the Affordable Homes Programme, nor transfer funding from sales to housing companies or arms-length management organisations providing housing services on behalf of local authorities.
This means that they have only been able to replace around a third of homes sold since 2012, impacting on their ability to provide housing for homeless and vulnerable families.
The LGA says the scheme faces an uncertain future unless councils are given the flexibility to set discounts locally and retain 100 per cent of sales receipts to fund the replacement of homes sold off under the scheme.
Cllr David Renard, the LGA’s Housing Spokesperson, said: “Councils want to urgently address the number of people on waiting lists for a council home and stuck in temporary accommodation.
“At a time of an escalating cost-of-living crisis, we urgently need to build more council homes, not have less.
“Every home sold that isn’t replaced risks pushing more families into the private rented sector, driving up housing benefit spending and rents, and exacerbating our homelessness crisis.”