Right to Buy under threat from lack of council houses

THE Right to Buy scheme could collapse because Britain is running out of council houses, a report warns.

More than 60,000 houses have been sold under the scheme in the past six years, according to the Local Government Association (LGA).

The sale price of Right to Buy homes is typically half the market rate, which has left local authorities with enough money to build or buy just 14,000 homes to replace the ones they sold off.

The scheme helps eligible council and housing association tenants buy their home with a discount of up to £80,900, or £108,000 in London.

More than 1.8million council homes have been sold in this way since the scheme was introduced in 1980. The number of dwellings owned by local authorities in England declined from 5.1million in 1980 to 1.7million in 2014.

Two thirds of councils in England will not be able to replace the same number of homes they sell under the scheme in five years’ time, the LGA said. It calls for councils to be given more funds to replace homes they sell.

About 12,224 houses were sold under the scheme last year. By 2023, councils will only be able to replace 2,000 of them, the report predicts.

The requirement to hand over a significant portion of all receipts to the Treasury hampers the ability of local authorities to reinvest in housing.

Martin Tett, of the LGA, said: “We know that the Right to Buy changes lives – it helps people who otherwise wouldn’t be able to get on the ladder experience the security and independence of home ownership. It is essential that it continues to do so.”