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Councils 'hamstrung' by new right to buy as replacement homes fail to materialise

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Councils 'hamstrung' by new right to buy as replacement homes fail to materialise


Published by Anonymous for in Housing and also in Central Government, Local Government

Councils 'hamstrung' by new right to buy as replacement homes fail to materialise Councils 'hamstrung' by new right to buy as replacement homes fail to materialise

Four out of five councils are finding it difficult to replace homes sold under right to buy, because the scheme is "bureaucratic and inflexible", according to a new report published today.

Government figures show that over 10,000 homes were sold under the scheme last year (January to December) - more than double that of 2012.

However, 80% of councils responding to a new Local Government Association (LGA) survey feel that the current system does not allow them to replace these lost homes. This hinders councils' efforts to find homes for those residents currently on their waiting lists.

With almost 1.7 million households currently waiting for a home, the LGA said it is imperative that councils have the powers to replace housing sold through the right to buy quickly and effectively.

Now the LGA, which represents almost 400 councils in England and Wales, is calling for councils to be allowed to retain 100 per cent of receipts directly from right to buy sales to support new housing.

This would mean scrapping the current arrangements which involve time and resource-intensive form filling and restrictions on how councils use the receipts and their own land and assets to build new homes. The LGA is supporting amendments, which call for this, to the Deregulation Bill, which is currently going through parliament.

It is also supporting measures to allow councils to set the right to buy discount locally so that it reflects the cost of houses in the area.

When former housing minister Grant Shapps announced the revamped right to buy back in 2011, he said the government was committed to ensuring that every home sold would be replaced by a new one. But the LGA said councils were "hamstrung" by the new system.

Cllr Mike Jones, chairman of the LGA's environment and housing board, said: "There are millions of people on council waiting lists and local authorities want to get on with the job of building new homes that people in their areas desperately need. That is why it is so important that councils have the power and funding to replace any homes sold under the right to buy quickly.

"Yet they are being hamstrung by the current system which is bureaucratic and inflexible.

"The common sense answer to this housing crisis is for the government to allow councils to retain 100% of the receipts from right to buy directly."

Under the current system, the amount of receipts kept by the Treasury is based on the predicted amount of right to buy sales in each authority. This means that only when the Treasury has received the predicted amount does money become available to be retained locally via a process set up and administered by the Homes and Communities Agency.

The government has put in place an application process for local authorities to retain a share of right to buy receipts locally to invest in replacement stock. The current system requires councils to submit quarterly returns to government setting out the amount that it will retain and the amount that it will pay to the department.

The process requires that capital receipts must constitute no more than 30% of the total amount spent on replacement homes. In addition, councils are prohibited from counting the contribution of their own land as part of the development cost for the purpose of providing a site for social housing.

Happier times: Prime Minister David Cameron and then housing minister Grant Shapps launch the revamped right to buy.


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