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‘Fire Sale’ of Council Houses is unsustainable

Social Housing February 2nd, 2018
‘Fire Sale’ of Council Houses is unsustainable

Arthur investigates claims by the Local Government Association (LGA), that the current sell-off of council houses is unsustainable.

Over the years since David Cameron increased the discount available under the Right to Buy scheme, sales of council houses to their tenants has dramatically increased. Not only has the amount of buyers increased, but the discount that the buyers are receiving has also shot up. This has led to the government selling off more properties but still facing the problem of a lack of funding to replace them. The LGA report states that this ‘firesale’ is unsustainable and is putting even more pressure on local government.

From 2012 to 2017, the amount of sales under the Right to Buy scheme have increased by 409%. Furthermore, the average discount on a council house has rocketed to over £60’000. In real terms, this means that buyers are asked to pay only 67% of the houses value. These huge numbers make it impossible for local governments to build council houses at the same rate they are being sold, especially when they aren’t allocated the full receipt to replace the house.

The Right to Buy scheme is good. It allows those that would otherwise be unable to get onto the property ladder an opportunity. However, this level of selling, at such a discounted rate. The problem becomes even worse when, as the LGA explain, one realises that a lot of the council houses sold under Right to Buy end up being rented privately. This is not how the system was designed to work and it is forcing many vulnerable families into the private rental sector or onto the streets.

Judith Blake, of the LGA, commented ““For Right to Buy to work, councils must be able to replace every home sold. Councils must be allowed to set Right to Buy discounts locally, retain Right to Buy sale receipts in full to replace sold homes, and be given the freedom to borrow to build new affordable homes and play a lead role in tackling the country’s housing shortage.”


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