Tenants have received discounts of nearly £5 billion to help purchase their council homes under the Right to Buy (RTB) scheme since the size of the discount was increased in April 2012, according to new LGA analysis.
While Right to Buy has helped many families get on the housing ladder, the LGA said 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.
The national RTB discount, set by government, currently averages 42 per cent of market value, meaning council properties can be bought for almost half price. Since the Government increased the RTB discount in April 2012, the average discount on a property has increased by 137 per cent to more than £63,000.
Consequently, the LGA estimates that tenants have received £4.9 billion in Right to Buy discounts to buy their own home.
The size of the nationally set discount has led to a surge in the number of homes sold under RTB – with 79,119 homes sold between 2012/13 and 2018/19.
With councils only able to use a third of each retained RTB receipt to build a replacement home, they have only been able to replace around a quarter (21,720) of the homes sold. This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents, and exacerbating our homelessness crisis.
Cllr David Renard, the LGA’s Housing Spokesman, said: “Right to Buy continues to enable many families to achieve the dream of getting on the housing ladder and owning their own home. Without reform of the scheme, future generations will not enjoy the same opportunity.”