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Latest RTB sales figures 29/09/2016

The DCLG's latest figures show an increase of 21% in the number of homes sold under the Right to Buy (RTB) in the first quarter of this financial year compared to the same quarter of 2015-16.


In April to June 2016 (Q1), councils in England sold an estimated 3,362 dwellings under the government's RTB scheme - an increase of 21% from the 2,779 sold in the same quarter of 2015-16.


The average capital receipt (after award of RTB discount) per dwelling sold in the first quarter of this financial year was £84,000 compared to £80,000 in the same quarter of 2015-16. 


The history of RTB sales show that the number of RTB sales decreased greatly between 2006-07 and 2009-10. They were relatively stable between 2009-10 and 2011-12 with sales then running at just over 2,500 dwellings per year in each of those four years. 


However, RTB sales have increased significantly from 2012-13 following the introduction of the "re-invigorated RTB" and significantly increased maximum RTB discounts which now stand at £103,900 in London and £77,900 in the rest of England. RTB sales in England in 2015-16 had increased to 12,246.


In introducing the re-invigorated RTB, the government also pledged to provide an affordable dwelling for each additional RTB dwelling sold under this scheme. An estimate of the projected RTB sales without the increases in RTB discounts was calculated and any RTB sales under this scheme above these projections are considered "additional". These "additional" sales are subject to the commitment to provide an affordable dwelling for each RTB dwelling sold.


Councils who have entered into a RTB Agreement with the government are allowed to retain 100% of the capital receipt and have three years from the date of the sale of each "additional" RTB sale in which to commence provision of an additional affordable home to replace the RTB property sold. However, they're restricted in the amount of capital receipts that they can contribute to each new home. Under the agreement, if a council fails to provide an additional replacement property a proportion of the capital receipt is transferred to the Homes & Communities Agency (HCA) or Greater London Authority (GLA) who use these "recycled" RTB receipts to deliver starts and acquisitions of replacement affordable homes.


The DCLG's figures also show that 45,117 council dwellings were sold under the RTB between 2012-13 Q1 and 2016-17 Q1 and there have been only 7,018 additional affordable housing units delivered by councils, the HCA and the GLA. 


However, taking into account calculation of additional RTB sales attributed to the re-invigorated RTB and the period of 3 years in which local authorities are expected to have commenced replacement, DCLG argue that the target for one for one replacement has been exceeded as there were 4,389 "additional sales" between 2012-13 Q1 and 2013-14 Q1 with 7,018 additional affordable units delivered in the same period.


There is however, considerable doubt that the pace of replacement will keep pace with the increased number of RTB sales over the next few years as illustrated by a recent report from the National Audit Office and DCLG officials are launching a review of the current agreement on replacement of homes sold under the Reinvigorated Right to Buy.

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