Councils call for Right to Buy discounts to be set locally

Town hall leaders have called on the government to allow Right to Buy (RTB) discounts to be set locally.

New figures released today by the Local Government Association (LGA) show that the average discount given to tenants looking to buy their council home under the scheme is now more than £63,000.

As a result, the LGA estimates that tenants have benefited from £4.9 billion in RTB discounts in order to buy their own home since 2012.

According to the LGA, 79,119 homes were sold off 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 these homes sold in the same period.

The rest of the money from RTB sales goes direct to the Treasury.

In its Budget submission, the LGA has called on ministers allow councils to set discounts locally and keep 100% of sales receipts to replace homes.

A survey published last year by the National Federation of ALMOS (arms-length management organisations) revealed council-owned housing companies were only able to replace 69% of RTB sales in 2018.

‘We were pleased the government listened to our call to scrap the housing borrowing cap to give councils more freedom to build council homes,’ said the LGA’s housing spokesman, Cllr David Renard.

‘But it makes no sense if these homes are then potentially sold at a heavily discounted price. Protecting council investment in new stock is crucial if we are going to build the homes the country needs.

‘It is wrong for the same level of discount to be applied all over the country. Local housing markets differ enormously and this national discount is impacting on different areas of the country in different ways,’ added Cllr Renard.

‘Given the government’s commitment to level up powers and investment in local areas across all parts of the country, we would want to see the flexibility for councils to be able to set discounts for their local area.

‘The size of discount is also driving a surge in homes being sold under RTB, which councils are unable to keep up with and replace with new homes for those who desperately need them.

‘It is vital that councils can set their own RTB discounts depending on the circumstances of their local area and housing markets. Councils must also be able to keep 100 per cent of sales receipts, be permitted to use all of it to replace homes sold, as well as have the ability to combine receipts with government grant.’

Photo Credit – Mastersenaiper (Pixabay)