Skip to main content
Shelter Logo
England

Government’s extension of Right to Buy will cost councils an average £26 million each, warns Shelter

Posted 04 May 2016

The average council in England will need to pay a staggering £26 million a year to the government to fund their flagship Right to Buy extension, new research by Shelter reveals today.

The policy, now being put through parliament as part of the government's Housing and Planning Bill, would force local authorities to sell off a proportion of their council houses on the open market once they become vacant.  The money would then be used to fund discounts of up to £100,000 for housing association tenants taking up the Right to Buy.

Shelter estimates that this could force the sale of 23,500 council homes across the country in just one year. Over three years this would be enough to house the entire population of Oxford.

Shelter's analysis estimated the value of council homes in each area that are likely to become vacant and compared this to the £4.5 billion per year needed by the government to fund the extension of Right to Buy. This process also reveals the councils that will be hit hardest by the sell-off.

Most worryingly, the Housing Bill makes no commitment to replace the homes sold off like-for-like. This means that genuinely affordable homes in an area could be replaced by Starter Homes costing up to £250,000, or £450,000 in London. And with only one home replaced for every eight sold through the existing Right to Buy scheme, it's likely that many won't be replaced at all.

Birmingham tops the list, with the council needing to raise a whopping £145m per year from the sale of its council houses, followed by Leeds (£129m) and Southwark (£122m).

At a time when the government has pledged to fix our housing shortage, Shelter is warning that this policy risks further shrinking the supply of genuinely affordable homes.

Campbell Robb, Shelter's Chief Executive, said: "With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.

"Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property. Ultimately, far more people will lose out and be left with no choice but expensive, unstable private renting.

"The government is out of touch on this issue, and running out of time to help the millions of ordinary people crying out for a home that they can actually afford."

Case Study: Becky, a teaching assistant, and her husband, a civil servant, are renting and have been on their local housing register since 2004.

She says, "We've been on a housing waiting list for twelve years, and are no closer
to a stable home. If our tenancy ends, we'll really struggle to afford somewhere else to rent. We could be homeless.

"The government says it's for hard-working people. My husband and I both work hard, but we could never begin to afford our own place. If they're selling off the last council homes, and making the chance of getting a stable home even more remote, how are they possibly helping us?"

Notes to editors:

Shelter has been helping people fight bad housing and
homelessness for 50 years. For free and independent advice from Shelter visit shelter.org.uk/advice or call the
helpline on 0808 800 4444.  

  • For further information on the methodology and statistics, see our full report.

  • To fund the extension of Right to Buy to Housing Associations, the government is forcing councils to sell off 'higher value council housing' once it becomes vacant. The government's estimated yearly cost of Right to Buy is £4.5bn. To reach this figure, based on the annual vacancy rate of council housing in each local authority, we have calculated that every council will need to sell off an average of £26m worth of council homes per year.

  • Previously the Housing Bill called for the sale of 'high value council housing', worked out by a defined threshold for each region. A recent amendment changed this to 'higher value council housing', giving the Communities Minister the power to tell each local council what proportion of their vacant stock is considered high value and thus, what proportion should be sold off. The original threshold would have resulted in a shortfall, but the amendment will mean as many council homes as necessary can be defined as 'higher value' in order to raise the £4.5bn needed.  Some more information on this change can be found here.

  • Government figures estimating the cost of extending the Right to Buy to Housing Associations were issued in a pre-election press release announcing the policy in April 2015. Copies can be forwarded on if needed.Shelter is not opposed to the Right to Buy policy in and of itself, but has serious concerns about the ability of councils to replace housing stock sold off. You can read more on our concerns here.

  • For any other queries, please don't hesitate to get in
    touch with the Shelter Press Office on 020 7505 2162 or press_office@shelter.org.uk

RegionYearly amount to be raised by regionYearly homes to be sold by regionYearly average to be raised per councilYearly average homes to be sold per councilNumber of councils hit
England4,500,000,00023,50326,000,000137172
East545,000,000208422,000,0008325
East Midlands351,000,000278214,000,00011125
London1,428,000,000293549,000,00010129
North East218,000,000184327,000,0002308
North West222,000,000183620,000,00016711
South East450,000,000203514,000,0006233
South West271,000,000151219,000,00010814
West Midlands426,000,000351128,000,00023415
Yorkshire and the Humber588,000,000496549,000,00041412
  1. For further information on the methodology and statistics, see our full report.

  2. To fund the extension of Right to Buy to Housing Associations, the government is forcing councils to sell off 'higher value council housing' once it becomes vacant. The government's estimated yearly cost of Right to Buy is £4.5bn. To reach this figure, based on the annual vacancy rate of council housing in each local authority, we have calculated that every council will need to sell off an average of £26m worth of council homes per year.

  3. Previously the Housing Bill called for the sale of 'high value council housing', worked out by a defined threshold for each region. A recent amendment changed this to 'higher value council housing', giving the Communities Minister the power to tell each local council what proportion of their vacant stock is considered high value and thus, what proportion should be sold off. The original threshold would have resulted in a shortfall, but the amendment will mean as many council homes as necessary can be defined as 'higher value' in order to raise the £4.5bn needed.  Some more information on this change can be found here.

  4. Government figures estimating the cost of extending the Right to Buy to Housing Associations were issued in a pre-election press release announcing the policy in April 2015. Copies can be forwarded on if needed.Shelter is not opposed to the Right to Buy policy in and of itself, but has serious concerns about the ability of councils to replace housing stock sold off. You can read more on our concerns here.

  5. For any other queries, please don't hesitate to get in touch with the Shelter Press Office on 020 7505 2162 or press_office@shelter.org.uk.