Local authority leaders have welcomed the Government’s decision to allow councils to keep 100% of their right to buy receipts for the next two years.

A letter sent to all council chief executives and section 151 officers on Friday on behalf of Michael Gove confirmed that councils would be able to keep their right to buy receipts for 2022-23 and 2023-24.

A Department for Levelling Up, Housing and Communities spokesperson said: ‘We want councils to be able to keep more of the money generated from Right to Buy sales to invest in new social homes for local people and will set out further detail in due course.’

A spokesperson for the Local Government Association (LGA) said they were ‘incredibly pleased’ by the decision.

A report published last month by the LGA, the Association of Retained Council Housing and the National Federation of ALMOs warned that social housing in England would lose a further 57,000 homes by the end of the decade because of the Right to Buy scheme.

The LGA said that councils should be allowed to set discounts locally and retain 100% of sales receipts to avoid such a loss of social housing stock.

Responding to today’s announcement, the LGA spokesperson said: ‘We are incredibly pleased to see these changes to the Right to Buy (RTB) scheme, something we have long-called for as the previous rules, alongside the significant discounts to tenants, have meant that councils have struggled to replace social homes on a one-for-one basis.

‘With long waiting lists for social housing and the private sector becoming more and more unfeasible for some households, ensuring that councils have the funding to replace any homes sold through RTB quickly is crucial, and this announcement should go far in supporting this.’

The spokesperson added that the change should now be made permanent and that councils also need the ability to be able to set discounts locally.