Charity says housing sell-off will leave councils billions out of pocket

Shelter forecasts that local authorities will lose billions in revenues from the forced sell off of council homes.

Shelter forecasts that local authorities will lose billions in revenues from the forced sell off of council homes.

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A SELL-OFF of council houses will cost local authorities millions of pounds in lost revenue and will accentuate the already desperate affordable housing crisis, a leading charity has warned.

Research published today by housing charity Shelter reveals how significant the impact is expected to be of the Government’s extended Right to Buy scheme.

Our desperate shortage of genuinely affordable homes is leaving millions of people across the country struggling to find a stable place to live.

Campbell Robb, Shelter’s chief executive

In an analysis of the Yorkshire region, Shelter said that the proposed extension as part of the Housing and Planning Bill is “particularly concerning” for the Harrogate and Knaresborough, and York Outer areas.

Harrogate and Knaresborough will lose almost £12.4 million in revenues and York Outer, more than £9.6m, as a result of the forced sale of council homes, with no guarantee money generated from sales will be put back into local areas, Shelter said.

Nationally, the policy will drain £1.2 billion a year away - and £6bn over the course of this Parliament - from cash-strapped local authorities, which Shelter said was enough to build “around 20,500 genuinely affordable homes”.

Instead, as the proposed Bill stands, the money raised from forced sales will go to the Treasury and will largely be spent on extending the new Right to Buy discounts - of up to £100,000 - to housing association tenants.

Shelter also highlighted how areas where the government is championing devolution also stand to lose out. The West Yorkshire Combined Authority stands to lose around £32.8m a year, a sum which could otherwise pay for 743 affordable homes to be built per year, the charity said, while the Sheffield City Region could lose £7.8m a year, enough for 178 affordable homes to be built annually.

Ahead of the Housing and Planning Bill’s final day of its report stage tomorrow, Campbell Robb, Shelter’s chief executive, said: “Our desperate shortage of genuinely affordable homes is leaving millions of people across the country struggling to find a stable place to live.

“Yet at a time when cash-strapped local authorities are already at breaking point, the government plans to force them to sell millions of pounds worth of the few genuinely affordable homes they have left.

“It’s good that the government has finally recognised our growing housing crisis, but selling off council homes to pay for Right to Buy discounts of up to £100,000, or £450,000 Starter Homes, are not going to solve it. To give ordinary families any real hope of a stable future, the government must prioritise investing in homes that people on low or average incomes can actually afford to rent or buy.”

Currently, for every nine council homes sold off via Right to Buy, only one replaces them, Shelter said.

Councillor Mike Chambers, cabinet member for housing at Harrogate Borough Council, said he expected a “mechanism” within the final Bill to help local authorities meet the ongoing need for providing new affordable homes. He said: “The Housing Bill is only on its second reading so no-one is fully aware of what the government will come up with yet but clearly there is going to be an effect if this bill comes out as it was originally proposed.”

A spokesman for the Department for Communities and Local Government said that while more council housing has been built since 2010 than in the previous 13 years, there are “billions of pounds locked up in high value stock, which will be reinvested in building of new homes that better meet local needs as well as supporting home ownership through Right to Buy”.

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