Local authority leaders have warned that the billions of pounds that have been spent on Right to Buy discounts are threatening the future of the homeownership scheme.
The size of the Right to Buy (RtB) discounts was increased in 2012, and as a result the average discount has risen by 150% to more than £67,000 in 2020/21. This has led to a quadrupling in the number of Right to Buy Sales.
The Local Government Association (LGA) has calculated that in total £6bn has been given out in discounts.
Councils are prohibited from keeping all of the money from Right to Buy sales. This means that they have only been able to replace around a third of homes sold since 2012, which in turn means that they are struggling to provide housing for homeless and vulnerable families.
The LGA warned that the scheme faces an uncertain future unless councils are given the flexibility to set discounts locally and retain 100% of sales receipts to fund the replacement of homes sold off under the scheme.
Cllr David Renard, housing spokesperson for the LGA, said: ‘Councils want to urgently address the number of people on waiting lists for a council home and stuck in temporary accommodation. At a time of an escalating cost of living crisis, we urgently need to build more council homes, not have less.
‘It is becoming impossible for councils to replace homes as quickly as they’re being sold and they are increasingly having to do so with far less money than the property sells for because of discounts being offered.
‘Every home sold that isn’t replaced risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis.
‘Right to Buy continues to enable many families to achieve their dream of getting on the housing ladder and owning their own home. However, without reform of the scheme, future generations will not enjoy the same opportunity.’