Nearly £5bn in Right to Buy discounts handed out since 2012, analysis finds
Tenants across England have collectively received discounts of nearly £5 billion to help purchase their council home under the Right to Buy (RTB) scheme since 2012, according to analysis.
The Local Government Association (LGA) estimates that since April 2012, tenants have benefited from £4.9 billion in Right To Buy discounts in order to buy their own home.
The Right to Buy scheme was introduced in 1980, to help council and housing association tenants in England buy their home at a discount.
The scheme was reinvigorated from April 2012, with maximum discounts being increased from as little as £16,000 in some areas to a maximum that now stands at £82,800 across England and £110,500 in London.
The LGA argued that, while the scheme has helped many families to get on the housing ladder, it faces an uncertain future unless councils are given the flexibility to set discounts locally and retain 100% of sales receipts to fund the replacement of homes sold off under the scheme.
It said the national RTB discount currently averages 42% of market value, meaning council properties can be bought for nearly half price.
Since the Government increased the size of the RTB discount in April 2012, the average discount on a property has increased by 137% to more than £63,000, the LGA said.
It said the size of the nationally-set discount has led to a surge in the number of homes sold under the RTB scheme – with 79,119 homes sold between 2012/13 and 2018/19.
Councils have only been able to replace around a quarter (21,720) of these homes sold in the same period, the LGA said.
It said that the loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents and worsening the homelessness crisis.
The LGA is calling on the Government in the March 11 Budget to allow councils to set discounts locally and keep 100% of sales receipts to replace homes.
Councillor David Renard, the LGA’s housing spokesman, 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.”
He said councils should be given the flexibility to set RTB discounts for their local area.
He said: “The size of discount is also driving a surge in homes being sold under RTB, which councils are unable to keep up with and replace with new homes for those who desperately need them.
“This is aggravating the housing crisis by further reducing the social housing available to councils to support vulnerable people and their families and reduce homelessness.
“It is vital that councils can set their own RTB discounts depending on the circumstances of their local area and housing markets.”