Councils must be given 100% of receipts generated by Right to Buy sales if they are to stand any chance of stemming the loss of social housing, a report claims.
Almost three-quarters of local authorities say the current system means they can only replace half or fewer homes. Some 12% of those surveyed said they could not replace any housing sold.
The report by Chartered Institute of Housing (CIH), the Local Government Association (LGA) and the National Federation of ALMOs (NFA) has called on the next Government to grant councils far greater flexibility.
It shows 67 authorities generated £333m from Right to Buy sales in 2013-14 but only retained £144m for local reinvestment with the bulk of the remainder going to the Treasury. The funds can only used to pay for up to 30% of the cost of new social housing.
The report said councils should receive all Right to Buy receipts and be given more freedom to combine this with other funds in order to replace homes. In some circumstances local authorities should be able to vary the discount offered to tenants to reflect the huge variations in house prices across the country, it said.
Cllr David Sparks, LGA chair, said: ‘There are millions of people on council waiting lists and local authorities want to get on with the job of building new homes that people in their areas desperately need. That is why it is so important that councils have the power and funding to replace any homes sold under the Right to Buy quickly.
‘The common sense answer to this housing crisis is for the Government to allow councils to retain 100% of the receipts from Right to Buy directly and give councils greater flexibility over the level of discount and how they use them to replace the homes sold.’
CIH interim chief executive Gavin Smart said more homes would be replaced if ‘complex funding arrangements’ were changed. ‘By taking action now government can ensure that more social and affordable housing won’t be lost, which is vital for people on low incomes.
‘Since its inception, Right to Buy has helped millions of people become homeowners but there are many more who remain in housing need. It is crucial that every home sold is replaced - a few simple reforms would give councils a real fighting chance of achieving this.’
Sue Roberts, NFA chair, said: ‘Councils need to be able to replace lost social housing within their local communities so we are also asking the government to allow councils to be able to pass on Right to Buy receipts to their ALMOs, where they wish to, to allow them to get building and address the housing shortage that we are currently seeing across the UK.’
