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Social Housing: Right-to-buy Sales

Volume 837: debated on Thursday 18 April 2024


Asked by

To ask His Majesty’s Government what assessment they have made of the impact on the provision of social housing of removing the right of local authorities to retain 100 per cent of receipts from right-to-buy sales.

As a temporary measure, councils were able to keep 100% of the right-to-buy receipts from sales in 2022-23 and 2023-24. As councils have five years to spend these receipts, we are continuing to track the impact of allowing authorities to retain 100% of right-to-buy receipts. As previously announced, the cap on acquisitions funded through right-to-buy receipts is at 50% until 2025-26, to enable councils to do more acquisitions. The Government are working with councils to support their supply and delivery plans, and we are keeping the right-to-buy receipt flexibilities under revie w.

My Lords, with 3.8 million people on council housing waiting lists, some having waited nearly two decades, and with the economic case for social housing comprehensively demonstrated in the recent study by the National Housing Federation and Shelter, showing that building 90,000 social homes would add £51 billion to the economy, the need for delivery of more social homes gets more urgent by the day. Since the right-to-buy programme started in 1980, there has been a reduction in the number of social homes by 1.5 million. Some 40% of those homes are now let privately, and councils have no choice but to use them as expensive temporary accommodation for homeless families. That has pushed up the housing benefit since 1991 from £9 billion to £29.6 billion. Councils should be able to use the proceeds from right to buy to deliver like-for-like replacements, but with councils able to receive £100,000 of discount, that is difficult enough. Taking away the ability to retain 100% is another blow. Does the Minister not consider that this is an economically illiterate move, depriving people of the homes they need and driving the benefit bill ever upwards?

I draw the House’s attention to the fact that the right-to-buy receipt is only one very small portion of the entire receipts that are available to deliver affordable housing. Indeed, the £11.5 billion affordable homes programme is delivering thousands of affordable homes, including, since 2010, 696,000 new affordable homes, with over 172,600 homes available for social rent.

My Lords, I apologise to the noble Baroness for my enthusiasm but I could not believe the bare-faced cheek of asking this Question. There would have been no receipts from the sale of council houses if the party opposite had had its way. It was a Conservative Government who brought in the right to buy, and it was a Conservative Government who enabled people such as the deputy leader of the Labour Party to buy their council homes.

I agree with my noble friend’s comments. We are genuinely committed to supporting home ownership, especially for first-time buyers, no matter how they get on the housing ladder.

Surely the point is that a Labour Government created the right to buy, and all the work was done under a Labour Government, and then it was implemented by the Tories, but they cut it in half and did not allow the replacement of social housing, meaning that we have the present crisis that we have.

I am afraid that is not my understanding of what has happened historically, and I understand that some Members of this House may have been involved in setting up the original scheme.

I remind the House of my register of interests. Can we go back to the issue of the right to buy? In the last year, 10,896 homes were sold through right to buy in England and only 3,447 houses replaced them—a net loss of 7,449 in 2022-23. How would the Minister explain that to a family stuck in temporary accommodation which is gradually becoming permanent?

I do not recognise those figures. The figures I have in front of me are that, in 2022-23, local authorities reported 10,896 eligible sales, which was very similar to sales in 2021-22, and delivered 8,900 homes that same year. Overall, there was a net increase of 4,600 affordable homes in that year.

Has not the now overreaching transfer of housing from public to private sector landlords led to an explosion in rents, costing billions in increased housing benefit? Why should housing authorities be forced to pay for problems created by this strategy, when there is talk of losing a proportion of the capital receipts they desperately need to help fund housing for the homeless—a problem created by the Government? It seems to me that the only beneficiaries are to be private landlords and the Government’s PSBR, while the losers are the poorest in society.

I return to the statistic that we have increased the number of affordable homes by 482,000 during the period since 2010. That means there are more houses for people to rent at an affordable rent. We also acknowledge that the rent agreements with regards to the increases, particularly for social housing over the last year, while inflation was running high, have had an impact on the housing associations, but we are working closely with them to make sure that they have the right to increase their rents at an acceptable level while the tenants themselves are not having to struggle with the high cost of living.

My Lords, as one of the Housing Ministers in the 1979 Parliament, I say to the noble Lord, Lord Bird, that I do not recall the right-to-buy legislation being in my briefing pack when I took office. Returning to the original Question, I agree that we need more affordable homes. Has my noble friend seen a report by the Home Builders Federation that 13,000 sites for affordable homes have been earmarked as a condition for market sales on the rest of the site but no housing associations or local authorities have come forward to claim them? Can my noble friend find a solution?

I thank my noble friend for that question. We have been monitoring this for some time. All measures to increase the rate of housebuilding for the provision of affordable homes are being considered, including the preferential borrowing rate for councils, and housebuilding from the Public Works Loan Board, which has been extended to June 2025. Indeed, that 100% temporary measure for the right-to-buy receipts for the last couple of years was to increase the capital buffer to allow the speeding up of housebuilding and acquisition in the sector. The abolition of the housing revenue asset borrowing cap also helps, alongside the £11.5 billion affordable homes programme. We believe that local authorities and housing associations are being supported to maximise delivery at pace, and we strongly urge them to utilise the flexibility to build these new homes.

My Lords, whatever the data we are bandying around here, there is no doubt that right to buy and demolitions mean that we are losing social housing every year. As has already been said, large numbers of households are now forced to live in expensive and insecure homes in the private rented sector due to the lack of social homes. What plans do the Government have, recognising the point the noble Baroness is making, to further increase the supply of social housing to prevent right to buy eating into this crucial asset?

I return to the fact that the main programme we have is the £11.5 billion affordable homes programme, of which a large amount has been allocated for social and affordable housing. When we look at the numbers, the right to buy, and local authorities’ delivery through that mechanism, represents 14% of the overall affordable housing delivery—the highest recorded number of local authority completions in a decade. It is making progress, and the reality is that the rest of that budget is being spent in other ways and being delivered as we speak.

My Lords, does the Minister accept that she is referring to affordable housing, whereas my noble friend is talking about social housing? They are absolutely not the same thing—and in many areas affordable housing is anything but affordable.

I remind the House of the statistic I gave in answer to an earlier question: of those homes, since 2010, 172,600 are for social rent.

My Lords, further to the question from my noble friend Lord Young of Cookham, perhaps my noble friend the Minister has not quite grasped the root of the problem. We are dealing here with small and medium-sized housebuilders. When they generate social housing to accompany their private sector developments, that social housing frequently comes in penny packets, isolated to one house on the site and so on. There are 13,000 of these now waiting to be built, but the housing associations are not interested in them—they are simply not interesting to housing associations, as they are too difficult to manage. It is unblocking that logjam that I think my noble friend was asking my other noble friend on the Front Bench to address herself to.

Indeed, this is where a local authority could step in to deliver more replacement homes. In the current economic climate, councils are able to continue to deliver 50% of their right-to-buy replacement homes as acquisitions each year until 2025, with a focus on the purchasing of new homes. That should help small, medium-sized and large housebuilders.