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Housing shortage looms as local authorities set to sell

Posted by
23 Sep 2015
The housing charity Shelter has carried out research which suggests that Local Authorities, in particular around the South East and London, will be forced to sell a staggering 1 in 14 houses to the private market to enable them to fund the extension of the Right to Buy scheme that was announced in April.

The Government announced plans to expand the right to buy scheme to assured tenants of housing associations, offering them the same discount as secure Council tenants to buy the properties they live in at a discounted rate. The Government further announced that houses sold under the scheme would be replaced on a one-for one basis and furthermore a Brownfield Fund will be created to unlock homes on brownfield land for additional housing.

For some, this is a highly controversial proposal as sceptics of the plan question how Local Authorities will finance the building of new houses to replace those sold off and what the time delay would be in between properties being sold off and new properties becoming available. In the Conservative Party's 2015 Manifesto it was proposed that Local Authorities should sell their most lucrative council owned properties as they fall vacant to raise the finances.

Shelters research has indicated that a significantly high proportion of council owned properties will be sold under the proposal; citing the example of Kensington and Chelsea who may be forced to sell 97% of their total stock. A total of 6000 properties. In one of the most expensive boroughs to buy a property, this will likely have serious consequences for those people wishing to live in the area they potentially grew up in.

Shelter have called upon the Government not to proceed with the plans as it will hinder people on a waiting list for a council property to secure one.

Campbell Robb, Shelter's chief executive, said that selling off "large swathes of the few genuinely affordable homes we have left" would make the country's housing situation worse. "More and more families with barely a hope of ever affording a home of their own, and who no longer have the option of social housing, will be forced into unstable and expensive private renting,”

The Right to Buy extension is due to be included in next month's housing bill however both Councils and Housing Associations are warning that there will be a deficit between the funds raised from selling off properties versus the cost of building new. The government has estimated the cost £9.65 billion over four years. However Shelter predict that only £7.2 billion will be raised by the sales, leaving a £2.5 billion deficit.

Right to buy sales have steadily grown since the scheme's inception in 1980 and certainly from speaking with my public sector legal clients, the increase seems to be confirmed by the increase in workflow their legal teams are experiencing in this area. What remains to be seen is what impact the proposal will have on the wider property market and the benefits to the general population struggling to secure suitable and affordable accommodation.

If you would like to discuss the implications of the Right to Buy initiative even further, please contact me on 0161 834 1642.
Tagged In: Current Affairs, Legal
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