Government’s Right to Buy extension costs local councils millions

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18th May 2016 18:14 - Local Government

The housing charity, Shelter, has warned that the average local council in England will have to pay £26 million per year to fund the British Government’s Right to Buy extension.Government’s Right to Buy extension costs local councils millions

As part of the Housing and Planning Bill, Whitehall’s flagship policy makes it compulsory for councils to sell some of their properties on the open market once they become vacant.

Shelter has estimated that the new policy enforcement will force councils to sell approximately 23,500 properties in one year, across England.

The money raised from selling the vacant properties on the open market will be put towards funding discounts of up to £100,000 for housing associations adopting the Right to Buy scheme.

As part of the research, Shelter approximated the value of council properties in each area that is likely to become vacant and contrasted this with the £4.5 billion needed annually by the Government to fund the Right to Buy scheme. This comparison uncovered the £26 million needed by local councils per year, as well as which councils will be hit the hardest.

According to the figures, Birmingham will need to raise £145 million per year from selling council houses. Similarly Leeds will have to raise £129 million and Southwark will have to raise £122 million.

Shelter also warned that the implementation of the Housing Bill will result in the sale of affordable home which will be replaced by Starter Homes, which will cost up to £450,000 in London and £250,000 elsewhere. Some homes may not be replaced at all, as under the current Right to Buy scheme, just one home is built for every eight sold.

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