Councils set to retain 100% of Right to Buy income for two years

The Government plans to allow local authorities to keep 100% of the income from Right to Buy sales for 2022-23 and 2023-24 in order to boost social housing construction, it has emerged.

Commenting on the plans, a spokesperson for the Department for Levelling Up, Housing and Communities said: "We want councils to be able to keep more of the money generated from Right to Buy sales to invest in new social homes for local people and will set out further detail in due course."

London Councils reported that they had been told that a two-year freeze on capping the number of existing homes councils could purchase using Right to Buy receipts will also be implemented, alongside the changes to retaining Right to Buy income.

Welcoming the news, Cllr Darren Rodwell, London Councils' Executive Member for Regeneration, Housing & Planning, said the new flexibilities would provide "a shot in the arm for boroughs' housing ambitions".

Cllr Rodwell added: "We've long called for an end to all restrictions on how boroughs can use Right to Buy sales receipts. It is crucial that every penny raised from council house sales is available locally for replacing those homes."

It is thought that the changes will be particularly useful for boroughs in the capital, where 301,000 people are waiting for a council home, since purchasing properties will often be a faster option for securing homes.

The news comes a month on from a plea by the Local Government Association (LGA) for the ability to keep all Right to Buy sales receipts to avoid further losses of "desperately-needed social housing stock".

Research from the LGA estimated that total Right to Buy sales projected over the period from 2021 to 2030 would be in the region of 100,000, while total replacements were unlikely to be much above 43,000, resulting in a loss of 57,000 homes.

At the time, Cllr David Renard, housing spokesperson for LGA, said the analysis showed that councils "urgently need the funding and powers to replace any homes sold under [Right to Buy] quickly and reinvest in building more of the genuine affordable homes our communities desperately need".

The Government’s move was also welcomed by the Chartered Institute of Housing.

James Prestwich, CIH director of policy and external affairs, said: "CIH welcomes the government announcement that councils will be able to keep two years’ worth of receipts from selling homes under the right to buy to build new homes. The news follows regular recommendations from CIH and other sector bodies that councils should be able to retain all their right to buy receipts.

"The UK Housing Review shows that these total over £40 billion since right to buy began in 1981, only a small proportion of which have been spent on new homes. The Review also shows that there has been a net loss of 218,000 social rented homes over the last decade, during which 157,000 have been sold via right to buy.

"We would urge that the government consider making this change permanent. However, the urgency of the housing crisis means that more drastic action is needed: government should suspend the right to buy and halt the loss of social rented homes. This would follow the action taken in Scotland and Wales, where right to buy has already been ended because of the need to provide more social rented homes."

Adam Carey