Government plans to expand ‘Right To Buy’ to the social housing sector could result in the loss of up to 7,000 homes a year, damning new research shows.
The policy unveiled in the Conservative Party manifesto, and included in the Government’s new Housing and Planning Bill, risks decimating council housing at a time when there is desperate need for affordable homes.
The Bill includes new legislation on the sale of vacant ‘high-value’ council homes, allowing local authorities to use the cash generated to build new social housing and finance a new £1bn brownfield regeneration fund.
However, analysis from the Chartered Institute of Housing (CIH) shows that local authorities could be left with no money to replace homes they are forced to sell through the policy.
The analysis also suggests that the Government has exaggerated its expectations on the number of ‘high-value’ homes that will be sold to fund the building of new affordable properties.
According to the research, between 2,100 and 6,800 ‘high value properties’ will be sold each year, compared to the Government’s estimate of 15,000.
CIH says those sales will generate between £1.2bn and £2.2bn a year, which is far less than the Government’s estimate of £4.5bn, severely limiting the ability of local authorities to replace homes sold under Right To Buy.
£1.2bn is only half the amount needed to compensate housing associations for homes sold under the scheme, leaving local authorities with nothing to replace the homes sold – or for the brownfield regeneration fund.
The think-tank Policy Exchange has calculated that around 210,000 council homes would meet the government’s definition of ‘high-value’.
However, CIH says these figures are based on out-of-date stock data, with figures from March 2014 showing the number to be closer to 194,000 homes.
CIH chief executive Terrie Alafat said: “We support the government’s ambition to give people the opportunity to achieve their aspiration of home ownership, but if affordable housing is being sold, it is absolutely crucial that it is replaced on the same terms.
“However, our research appears to confirm our fears that the figures simply will not stack up.
“Selling high-value council homes to fund the extension of right to buy to housing associations could result in the loss of almost 7,000 council homes a year, at a time when more and more people are in need of an affordable home.
“Such a significant loss of desperately needed affordable homes would mean more people on lower incomes stuck on council waiting lists all over England – and for generations to come.
“The government should examine how to close this funding gap in the forthcoming spending review, so that both housing associations and local authorities are able to replace the homes they sell with new affordable homes to rent.
“There will undoubtedly be a significant time lag between homes being sold and new homes being built to replace them, especially at the beginning of the policy.
“Ministers should also be thinking about how to mitigate the impact in London, where this scheme will have a disproportionate effect because of the high numbers of high-value council homes.”
She added: “The government has said it wants to address our national housing crisis by driving up new house building so that we build one million new homes by 2020.
“But the combined impact of selling high value council homes and cutting affordable housing rents will make it virtually impossible for councils to play their part, as the government had originally planned.”
David Cameron recently announced that an agreement has been reached with housing associations and the CIH to expand Right To Buy to 1.3million more families.