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LGA - Extending right to buy to housing association tenants to cost £6bn by 2020

Extending the Right to Buy scheme to housing association tenants will cost £6 billion over the next four years as almost 100,000 households take up the offer, new analysis ahead of the Spending Review reveals this week.

It is forecast 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 £1.5 billion a year.

The Local Government Association (LGA) is warning that the offer must not be funded by forcing councils to sell-off their social housing, which would drive up rents and the housing benefit bill and lower the capacity of councils to build more homes and tackle waiting lists.

It is crucial that councils are able to retain 100 per cent of receipts from the sale of any council homes to reinvest in the desperately needed homes across the country.

The LGA has consistently made that case and is calling on Government to fund the policy by working with councils to build more homes on surplus public land. The LGA's submission to the Treasury ahead of the Spending Review projects this could raise £13 billion up to 2020.

New analysis for the LGA by Savills into Right to Buy also reveals:

the average national discount will be £63,271 per property, in London the average discount will be £95,533 and £52,431 outside

  • around 377,000 of housing association tenants (20 per cent) will be able to afford to buy their own home and that 24,000 will take up this offer each year
  • the majority of tenants taking up the Right to Buy (91 per cent) will be purchasing their home for under £100,000
  • around 1 per cent (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.

Council leaders are disappointed that the National Housing Federation has secretly attempted to strike a deal to voluntarily deliver the Right to Buy extension on the back of forcing the sale of council homes, and by its willingness to move away from providing the genuinely affordable homes the most vulnerable in our communities need.

The LGA is calling for an urgent meeting with the NHF and Ministers to ensure implementation of the scheme protects communities, councils and the Government from any unintended consequences.

Cllr Peter Box, LGA housing spokesman, said:

"We project around 100,000 housing association tenants are likely to take up the extension of Right to Buy up to 2020.

"Councils are ambitious to increase housebuilding across all tenures 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.

"Councils should always be free to manage their assets to meet the needs of local communities and must retain 100 per cent of all receipts to reinvest in new homes that our communities need and embark on large housing and regeneration programmes.

"Rather than funding the sale of affordable homes by selling other affordable homes, councils can help the Government raise money by building more new homes. We could raise £13 billion by developing surplus public sector land.

"This is more than enough to fund the Right to Buy extension over the long-term and would protect vital council investment in genuinely affordable homes crucial to investment in housebuilding, keeping rents low, and to reducing the housing benefit bill.

"Giving councils a lead role in housebuilding is the only way to guarantee new affordable homes are built for future generations and the millions of people already on waiting lists across the country."


Spending Smarter: A Shared Commitment', the LGA's 2015 Spending Review submission can be read here. It includes alternative proposals outlining how the Right to Buy extension can be funded by:

  • giving councils the ‘power to direct' the development and sale of all publicly owned land and sites
  • the Government raising its 2020 target to for public land and property sales from the current £5 billion to £13 billion. This would match the amount councils are set to achieve up to 2018.
  • handing councils 10 per cent of central government receipts from the sale of surplus land (£1.3 billion) to reinvest in the development of 180,000 homes. The remaining £11.7 billion could then be used to fund the Right to Buy extension.
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