Desperately-needed new social homes could go unbuilt unless councils are granted an extension to the time they are allowed to spend money from Right to Buy sales, the Local Government Association has warned.
Currently, councils are allowed to retain receipts from Right to Buy sales for three years to invest in replacement housing, before they have to return them to the Government if they are unspent.
With the building of new homes delayed or stopped altogether by the coronavirus crisis, many councils are concerned that they will not have the opportunity to spend the RTB cash on replacing much-needed homes sold under the scheme.
The LGA, which represents councils in England, says councils need to be given at least five years to spend RTB receipts to avoid the coronavirus crisis exacerbating the current shortage of social housing.
Cllr David Renard, the LGA’s housing spokesman, said:
“The coronavirus crisis has understandably brought many developments and the creation of new homes to a standstill and is holding back councils from building and replacing much-needed social housing.
“Money generated through Right to Buy sales is vital in enabling councils to replace sold homes.
“Councils need more time to spend this money. This is critical if we are to get building again once the coronavirus pandemic passes and we begin the national recovery.
There were 79,119 homes sold under RTB between 2012/13 and 2018/19.
With councils only able to use a third of each retained RTB receipt to build a replacement home, they have only been able to replace around a quarter (21,720) of the homes sold in the same period.
It is not often I find myself agreeing with the LGA but it is time all funds from RTB sales is 100% mandatorily spent on new build council housing (So as to actually increase supply) and not be passed to the spivs called government by massaging the system with dodgy time constraints and underhand schemes.
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If they had not been sold off in the first place, they would not need to be replaced.
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The only problem I have is the discounts applied to sale prices of RTB properties. Older property have higher maintenance costs so replacing old with new built should keep maintenance costs lower and replace lost social housing whilst helping social tenants into ownership when their financials improve. So it could work beneficially.
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