Section: Right to Buy

Right to Buy replacement will be all but eliminated in just five years

Posted 12.06.18
Local Government Association (LGA): Article link

The current system only allows councils to keep a third of each Right-to-Buy (RTB) receipt to build a replacement home and prevents local authorities from borrowing to make up the shortfall.

A new analysis by Savills, commissioned by the LGA, examines the impact of continued restrictions on councils' ability to borrow to build new homes.

It reveals that:

Two thirds of councils will have no chance of replacing homes sold off under RTB on a one-for-one basis in five years' time unless a significant restructuring of the scheme takes place.
Around 12,224 homes were sold under RTB last year. Faced with ongoing borrowing restrictions and based on the levels of sales remaining consistent, the analysis estimates that in 2023 councils would only be able to replace approximately 2,000 of these homes.
Less than a third of councils would be able to sustain any kind of one-for-one replacement of homes sold under the scheme in five years time.

Additional rules applied to Right to Buy, including a significant portion of all receipts being handed over to the Treasury rather than the communities in which the homes are sold, are hampering the ability of local authorities to re-invest in housing.