Urgent Right to Buy Reform Needed, Claims Local Government Association

by Susan Paige on September 29, 2019 · 0 comments

The Labour Party recently came under fire for suggesting that the UK’s Right to Buy scheme should be extended to private tenants. Understandably, private landlords across the UK lashed out at those proposing the scheme, stating that it would represent a doomsday scenario for millions of legitimate buy-to-let businesses across the UK.

Meanwhile, the Local Government Association has launched a fresh attack on the government’s current Right to Buy policy, insisting that it is simply unsustainable. A problem that has been escalating for some time, local authority house building simply cannot keep up with the rate at which council homes are being sold across the UK.

According to the LGA, the disparity between the number of council homes being built and properties being sold through the Right to Buy scheme has gone way beyond crisis point.

Speaking on behalf of the LGA, housing spokesperson Judith Blake agreed that RTB was an effective scheme for helping first-time buyers get on the housing ladder, but also stated that urgent reform is needed.

“Current arrangements are restricting councils from being able to replace homes being sold under the scheme. This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents, and exacerbating our homelessness crisis,” she said.

Demand Outstripping Supply

A consultation document released by the government confirmed the awareness of the inability of local authorities to build sufficient council properties to “match the pace of sales” under the RTB scheme.

According to the LGA, a total of 11,833 homes were sold in 2017-18 under the RTB scheme, with a full 70,000 having been sold over the past seven years.  During the same period, just 11,300 new council properties were built. This would suggest that unless the government quickly steps up its social housebuilding campaign, the RTB scheme in its current form will be rendered unsustainable.

While all this is going on, a pilot scheme that would extend Right to Buy to housing association tenants (initially being trailed in the West Midlands) seems to hit a roadblock. Despite £200m of government funds having been allocated to the project, evidence shows that no more than £10m has so far been invested in the initiative.

It was estimated that around 3,000 affordable homes would be sold under the scheme – no more than 181 homes have currently been sold during the trial in the West Midlands. Unfortunately, it seems it is an issue with no obvious immediate solution, given the complexities and time investment required in the planning and development of council homes and social housing in general.

Forced Private Tenancy Right to Buy

All of the above adds up to one of the primary arguments for those attempting to justify a new Right to Buy initiative for private tenants. They argue that the issue is relatively simple – private tenants are given the legal right to buy their properties after a specific period of tenancy, at a price agreed on an official government level.

Of course, property landlords argue that any such scheme could lead to the destruction of their businesses and portfolios. Particularly where landlords have invested heavily in the upkeep, maintenance and renovation of their properties, they could lose enormous amounts of money by being forced to sell them at a price they themselves do not decide on.

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