William Eichler 05 October 2015

Extending Right to Buy to housing association tenants will cost £6bn

Extending Right to Buy to housing association tenants will cost £6bn image

Extending the Right to Buy scheme to housing association tenants will cost £6bn over the next four years, according to a new analysis.

The analysis, carried out by Savills on behalf of the Local Government Association (LGA), forecasts that around 24,000 housing association tenants a year will buy their home with an average discount of £63,271 under the Right to Buy extension.

The discount would cost £1.5bn a year.

The LGA is warning that the offer must not be funded by forcing councils to sell off their social housing because to do so would drive up rents and the housing benefit bill and lower the capacity of councils to build more homes and tackle waiting lists.

‘Councils are ambitious to increase house building across all tenures,’ claims cllr Peter Box, LGA housing spokesman, ‘and support measures to help people into home ownership but this offer must absolutely not be funded by forcing councils to sell-off their homes. This could result in additional costs for the Government as more people move into the private rented sector and need housing benefit to afford higher rents.’

The LGA stresses the importance of allowing councils to keep 100% of the receipts from the sale of any council homes to reinvest in the building of more houses.

Other findings from the analysis include:

  • Around 377,000 housing association tenants (20%) will be able to afford to buy their own home and 24,000 will take up this offer each year.
  • The majority of tenants taking up the Right to Buy (91%) will be purchasing their home for under £100,000. While the average national discount will be £63,271 per property, in London it will be £95,533 and outside of London it will be £52,431.
  • Around 1% (6,500) of council tenants are projected to purchase their council home every year over the next four years, up from 0.7 per cent in 2013/14.

The LGA also calls on the Government to fund the policy by working with councils to build more homes on surplus public land. This could raise, according to the LGA’s submission to the Treasury, £13bn up to 2020.

The Local Government Association has called for an urgent meeting with the National Housing Federation (NHF) and Ministers to ensure implementation of the scheme protects communities, councils and the Government from any unintended consequences.

SIGN UP
For your free daily news bulletin
Highways jobs

Clinical Practitioner (Clinical Psychologist or Systemic Therapist)

Barnet London Borough Council
£47,841 - £52,886 Per Annum
An exciting career opportunity has arisen for an enthusiastic and energetic clinical psychologist or systemic therapist to... London (Greater)
Recuriter: Barnet London Borough Council

Public Health Project Development Manager

Barnet London Borough Council
£39,867 - £44,790 Per Annum
We are looking for an exceptional project manager who is used to working on a number of projects at any one time. London (Greater)
Recuriter: Barnet London Borough Council

Early Help Social Worker (Maternity Cover)

Barnet London Borough Council
£39,867 - £44,790 Per Annum
This post requires a Social Work qualification and relevant experience at a senior practitioner level. Barnet (City/Town), London (Greater)
Recuriter: Barnet London Borough Council

Scrutiny and Policy Officer

The Royal Borough of Kensington & Chelsea Council
£34,500 - £46,700 per annum
We are looking for someone who is interested in local democracy and community leadership.   Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Social Worker - Safeguarding

Essex County Council
£30906 - £42254 per annum
Social Worker - SafeguardingPermanent, Full Time£30,906 - £42,254 per annumLocation
Recuriter: Essex County Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue