Total right to buy
discounts have climbed to £1 billion a year – leading to a net loss of some
£300 million, according to new analysis from the Chartered Institute of Housing
(CIH).
Cutting the
discounts available could lead to an extra 12,000 homes being built a year, CIH
has calculated. But the organisation says right to buy should be suspended
altogether to stem the loss of social rented homes.
The extent of the
cost to the public sector is revealed in the UK Housing Review 2018 Autumn
briefing paper.
Right to buy
discounts were increased to £80,000 – and £108,000 in London – in April 2012.
Since then 69,467 homes have been sold while only 18,958 have been started or
acquired to replace them.
CIH chief executive
Terrie Alafat CBE said: “Not only are we failing to build enough new homes for
social rent, we are losing them at a time when we need them more than ever. Our research shows that we lost more than
150,000 social rented homes between 2012 and 2017 due to right to buy and other
factors, and that figure will reach 230,000 by 2020 unless we take action now.
“This new research
reveals just how much right to buy is costing the public sector every year.
Suspending the scheme means the government could invest the savings in more
homes for social rent – which is often the only truly affordable option for
people on lower incomes – and also in fairer and more cost-effective ways to
help tenants access home ownership.
“We support the
principle of helping tenants move into home ownership but it cannot be at the
expense of other people in need. About two-thirds of the discount that a tenant
who buys their home now receives is justified because they are sitting tenants
paying sub-market rent. But one-third is an excessive discount, which if clawed
back, would lead to more money coming to councils to build new homes.
“We know that the
government is consulting on ways to make it easier for councils to replace the
homes they sell under right to buy, which is welcome – but we still believe
ministers should suspend the scheme to stem the loss of social rented homes and
look at more effective ways to help people access home ownership.”
