Magazine article Public Finance

Use Right to Buy Revenue to Build More Social Housing, MPs Urge

Magazine article Public Finance

Use Right to Buy Revenue to Build More Social Housing, MPs Urge

Article excerpt

The government must allow councils to use the money raised from housing sales under the right to buy scheme to build more homes, MPs have urged.

The Commons communities and local government select committee says an extra 50,000 social rented homes a year are needed to keep up with demand more than are being built.

'Right to buy sales, coupled with the inability of local authorities to reinvest the proceeds, have been a major factor in the decline in the stock of social rented housing,' its report says.

Since 2004, councils have received 25% of right to buy proceeds through the housing revenue account, with the sales already below market price, The supply of rented housing notes. It cites Sheffield, where properties with a market value of £57m were sold but the council received less than £9m.

There is a 'widespread consensus' that the HRA system is not working, the report says. 'We urge the government to make reforms to allow right to buy receipts, and any borrowing taken against this income, to be easily and rapidly used by councils to build much needed homes. …

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