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RTB sales decrease but replacements fall short of 1 for 1 target 05/07/2018 Labelled as Scrutiny, Regulation

The latest government figures  show that sales of council housing under the Right to Buy (RTB) fell in the quarter to 31 March 2018 by 18% over the previous quarter, but the government continues to fall short of the promised one for one replacement of homes sold under the reinvigorated RTB from 2012.


In Quarter 4 (January to March 2018), councils sold an estimated 2,772 dwellings under the RTB scheme compared to the 3,313 sold in the same quarter of 2016-17  this is a decrease of 18%.


The average capital receipt per dwelling sold in quarter 4 2017-18 was £83,000.


Under the government's one for one commitment made under the Reinvigorated RTB introduced in 2012, local authorities have 3 years from the date of the sale of each additional home to provide a replacement home, but can only use RTB receipts to a maximum of 30% of the cost of providing a replacement.


These latest figures also show that the government is currently falling short of its commitment to replace dwellings sold under the Reinvigorated RTB by almost 1,500 dwellings and the gap between the numbers sold and the number of replacement homes provided continues to grow.


There were 19,445 additional RTB sales between Quarter 1 2012/13 and Quarter 4 2014/15 but only 17,911 additional affordable housing units were started or acquired by local authorities, Homes England and the Greater London Authority between Quarter 1 2012/13 and Quarter 4 2017/18.


ARCH Chief Executive John Bibby comments:


"Following publication of the previous quarter's statistics, which showed the growing gap between the number of homes sold and the number of replacement homes started, the Housing Minister promised to consult on greater flexibilities in use of RTB receipts by local authorities. These latest figures show that the gap is growing.


The Housing Minister's announcement of the intention to consult on use of RTB receipts was warmly welcomed by the stock retained sector, but over three months later we are still waiting to see that consultation. This delay is extremely disappointing, given the urgent need for more social housing - particularly as the government has pledged urgent action to fix the broken housing market and bring forward a new generation of council housing."


ARCH has long campaigned for such flexibilities and we set out a clear way forward in our list of asks submitted to Government prior to last year's Autumn Budget when we said that to ensure any council properties sold under the statutory Right to Buy are replaced on a one for one basis, the government should allow local authorities more flexibility to make maximum use of the capital receipts from RTB sales and urged the government to:


  • Allow councils to retain 100% of the revenue raised from sales to be reinvested locally in social rented housing.
  • Give councils the freedom to use RTB receipts to meet more than 30% of the cost of building replacement homes, to combine RTB receipts with grant funding, other capital receipts held in the housing revenue account (HRA) or public land and to pass RTB receipts to an arm's length management organisation (ALMO) or another council owned company -provided the money is still reinvested in new homes.
  • Extend the cost floor ceiling, which prevents new council homes from being sold at a loss, from 15 to 25 years.
  • Extend the three-year time limit within which RTB receipts must be committed to five years.
  • Allow councils freedom to reduce RTB discounts locally, where they are able to demonstrate that they will otherwise have insufficient receipts to enable them to replace homes sold and a reduction in the discount would be unlikely to significantly impact on the volume of sales.

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