The government has been urged to reform right to buy and cut the discounts available to tenants to stem the loss of social housing.
The National Housing Federation, which represents affordable housing providers, said it wanted to see a fundamental review of the whole policy including the discounts available to buyers, the eligibility criteria and where the money from sales goes. Right to buy, which was launched in 1980 by Margaret Thatcher, allows some council and housing association tenants to buy their property, currently at a 70% discount worth up to £77,000, or £102,700 in London.
Since its launch, the scheme has led to more than 2m homes being sold off, which councils and housing associations have not been able to replace.
In 2012, the scheme was reinvigorated to increase the discounts available to tenants. The number of people using it since then has leaped – between April and June 2,845 council-owned properties were sold to tenants, while 675 new houses were started or acquired by councils using right-to-buy funds.
On Thursday, the House of Lords will debate the deregulation bill, which includes a plan to reduce the eligibility period of residents from five years to three.
With the average cost of building a new home exceeding £140,000, the National Housing Federation said it was concerned that heavy discounts and a shorter qualification period would leave a lasting legacy on the availability of affordable homes in the future.
In a letter to the housing minister, Brandon Lewis, the federation urged him to ensure that every home sold was replaced on a like-for-like basis. Its chief executive, David Orr, said: “We support right to buy for helping people into home ownership, but that should not be at the expense of the 1.7 million people currently waiting for desperately needed social housing across England.
“Selling off homes at a price that leaves very little to replace them does not make sense. Unless we can replace every sold home with a new affordable home, there will be drastic consequences for future generations.”
Orr added that reforms were needed “to safeguard social housing and help end the housing crisis within a generation”.
The federation cited the example of Phoenix Community Housing, which received 5,500 social rented homes from Lewisham council in south London in 2007 at a time when the maximum discount was £16,000.
Under the terms of the transfer it retains a small proportion of the proceeds from each right to buy sale. One of its homes recently valued at £205,000 was sold through right to buy for £105,000, so the housing association only received £27,332.
Jim Ripley, the chief executive of Phoenix Community Housing, said: “We are keen to develop more of the affordable homes London desperately needs, but the current level of discount available through right to buy is seriously reducing our capacity to do this.
“The money we receive from a right to buy sale will barely cover the net rental income we have lost on the property. It certainly doesn’t provide us with any money to build a new affordable home to replace the one sold.”
Brandon Lewis said: “The reinvigorated right to buy helps social tenants move on and up the housing ladder, while providing new affordable homes to replace the stock sold. This increases home ownership, boosts housing construction and frees up housing waiting lists.
“Council house building starts are now at a 23-year high, with more new council homes having been started in the last year than in the 13 years of the last administration.”
Right to buy has been scrapped in Scotland, with sales set to end in August 2016.
