A cautious welcome for retention of Right to Buy receipts, but there’s a catch...
24 April 2023
Over many years, UK councils have lost thousands of tenanted properties to the Right to Buy, a process initially offering fair and affordable home ownership to council tenants, but which often simply loses council stock to the private sector, with properties bought up by larger, non-resident landlords and rented at higher, less affordable, rates – or even used as short-term or holiday lets.
This process takes secure, low-rent council property out of local authority control, exacerbating a chronic housing shortage for families, particularly in central London boroughs like Southwark, where demand is high. Building more properties is one solution, so the news from the Government that councils can retain 100 per cent of their Right to Buy receipts for 2022 to 2024, has been cautiously welcomed by Southwark Council. But there’s a catch.
While the council welcomes the news that the Government has decided it can keep two years’ worth of RTB receipts, with a value of potentially around £50m, unfortunately this comes with specific conditions which mean it will be difficult for the council to spend it as intended – to build new council homes replacing the ones we have lost through the Right to Buy.
The receipts cannot be combined with the GLA New Homes grant the council uses to pay for council housing, and which is earmarked against most of its schemes for the next five years – the time period stipulated by the Government to use the receipts within. Further, it can only fund 50 per cent of the value of buybacks, or any acquisition, as this is intended primarily to fund new properties, not existing ones.
Councillor Kieron Williams, Leader of Southwark Council said: Councillor Kieron Williams, Leader of Southwark Council said: “We have been calling for this change for many years, so I’m glad the Government has started to listen. With waiting lists for a council home rocketing across the country, it is simply common sense to reinvest 100 per cent of this money in building new council homes.
“However, there’s a big catch. The strings the Government has attached mean we can’t use this money to fully fund the cost of a new home, and we are not allowed to top it up with other funds we have access to either. That’s nonsensical.
“We need Government to listen again so we can keep building more homes. We completed our 1,000th new council home last month, and started building our 3,000th one too. I’m determined to build thousands more, but that’s going to require a Government that’s as committed to tackling the housing crisis as we are. Removing these counterproductive strings would be a positive next step.”
The council will work within the Government restrictions on how and when the money can be used and will aim to use it to build more council rented homes.
Page last updated: 24 April 2023