Councils spend millions in Right-to-Buy stock recovery

Councils spend millions in Right-to-Buy stock recovery

According to figures obtained by the BBC, local authorities have spent millions buying back homes which were sold at a heavily discounted rate under the Right-to-Buy laws.

The Right-to-Buy scheme, introduced by the government in the 1980's allowed council house tenants - and later social housing tenants - to buy their home, outright, at a discount.

However, it has emerged that the demand among local authorities for fresh housing stock has seen former council homes bought back at a significant loss.

One property in Islington, North London, was sold for £17,600 in 2004 - at a discount of more than £25,000) only to be bought back by the same authority for £176,000 11 years later. According to Freedom of Information requests, Islington spent more than £6m on homes it sold for less than £1.3m.

In the North of England, Wakefield Council spent more than £2.5m, on 35 homes it sold for close to £1m.

Experts have accused the scheme of placing added pressure on an already stretched social housing sector. According to the housing and homelessness charity, Shelter, more than 1.8 million households are currently waiting for a social home.

The Right-to-Buy scheme has already been axed in Scotland with the Welsh Government announcing that it hoped to follow suit later this year.

David Baybut, Head of Real Estate at Stephensons, said: "That local authorities are forced to buy back their former properties should come as no great surprise to anyone in the sector, though the amounts of money involved - money which could have easily been used to fund new homes - is shocking.

"Back in 2015, the National Housing Federation (NHF) estimated that only 46 per cent of properties sold under the Right-to-Buy scheme were being replaced. Some have put that figure as low as 12 per cent since the scheme was opened to housing association tenants.

"At the time the renewed scheme was announced, there were many unanswered questions surrounding the replacement of homes sold. What kind of homes? To what time scale? How many? Where? Two years on it seems there is little clarity on the matter and providers are still unable to meet the 'like for like' criteria.

"While nobody would doubt the good intentions behind the scheme in promoting home ownership, its execution is clearly still not working in all areas of the country and leaving fewer properties for those who really need them."

First published on 10th May at 24housing.co.uk