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Right to Buy discounts worth £5bn since 2012, says LGA
Council tenants have bagged nearly £5bn worth of discounts when purchasing their homes through the Right to Buy since the policy was reinvigorated in 2012, the Local Government Association (LGA) has said.
The body warned that the scheme’s future is “uncertain” unless ministers agree to its demand for councils to be granted flexibility to set their own discount levels and retain all the cash raised from sales.
Right to Buy discounts, set by government, currently average 42% of the home’s market value and can be worth up to £110,500 in London.
The discounts available were hiked dramatically in April 2012 by David Cameron’s government and the average giveaway for tenants has since increased by 137%.
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Nearly 80,000 council homes were sold through the Right to Buy between 2012/13 and 2018/19, with an average discount of more than £61,000.
Only 21,720 replacement homes have been started during that time as councils are only able to use a third of each sale receipt to fund building.
Inside Housing revealed last year that one in seven homes sold through the Right to Buy was purchased by a tenant on housing benefit – meaning someone else would need to be providing funds to help with the purchase.
David Renard, housing spokesperson for the LGA and leader of Swindon Council, said: “Right to Buy continues to enable many families to achieve the dream of getting on the housing ladder and owning their own home.
"Without reform of the scheme, future generations will not enjoy the same opportunity.
“It is wrong for the same level of discount to be applied all over the country.
"Local housing markets differ enormously and this national discount is impacting on different areas of the country in different ways.
“Given the government’s commitment to level up powers and investment in local areas across all parts of the country, we would want to see the flexibility for councils to be able to set discounts for their local area.”
He added that the “surge” in homes sold through the Right to Buy since 2012 is “aggravating the housing crisis by further reducing the social housing available to councils to support vulnerable people and their families and reduce homelessness”.
Introduced in the Housing Act 1980, the Right to Buy allows council tenants to buy their home at a discount – or housing association tenants whose home used to be owned by a council.
By multiplying the average discount for each year by the number of sales, the LGA estimates that £4.9bn in Right to Buy discounts were awarded between April 2012 and March 2019.
