Right to Buy extension will cost SW councils millions

The average council in the South West will need to pay a staggering £19.4 million a year to the government to fund their flagship Right to Buy extension, new research by Shelter reveals today.

The policy, now being put through parliament as part of the government’s Housing and Planning Bill, would force local authorities to sell off a proportion of their council houses on the open market once they become vacant.  The money would then be used to fund discounts of up to £100,000 for housing association tenants taking up the Right to Buy.

Shelter estimates that this could force the sale of 23,500 council homes across the country in just one year. Over three years this would be enough to house the entire population of Bournemouth.

Shelter’s analysis estimated the value of council homes in each area that are likely to become vacant and compared this to the £4.5 billion per year needed by the government to fund the extension of Right to Buy. This process also reveals the councils that will be hit hardest by the sell-off.

Bristol tops the list, with the council needing to raise £67m per year from the sale of its council houses, followed by Swindon (£29m) and Cornwall (£27m).

Most worryingly, the Housing Bill makes no commitment to replace the homes sold off like-for-like. This means that genuinely affordable homes in an area could be replaced by Starter Homes costing up to £250,000, or £450,000 in London. And with only one home replaced for every eight sold through the existing Right to Buy scheme, it’s likely that many won’t be replaced at all.

At a time when the government has pledged to fix our housing shortage, Shelter is warning that this policy risks further shrinking the supply of genuinely affordable homes.

Campbell Robb, Shelter’s Chief Executive, said: “With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.

“Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property. Ultimately, far more people will lose out and be left with no choice but expensive, unstable private renting.

“The government is out of touch on this issue, and running out of time to help the millions of ordinary people in the South West crying out for a home that they can actually afford.”

Case Study: Becky, a teaching assistant, and her husband, a civil servant, are renting and have been on their local housing register since 2004.

She says, “We’ve been on a housing waiting list for twelve years, and are no closer to a stable home. If our tenancy ends, we’ll really struggle to afford somewhere else to rent. We could be homeless.

“The government says it’s for hard-working people. My husband and I both work hard, but we could never begin to afford our own place. If they’re selling off the last council homes, and making the chance of getting a stable home even more remote, how are they possibly helping us?”