Four in ten former Nottingham council homes bought under the ‘Right to Buy’ policy are now in the hands of private landlords – prompting the council to welcome planned changes to the scheme.
Right to Buy was first established as a key Conservative housing policy by Margaret Thatcher, meaning that since October 1980, council house tenants have been able to buy their homes at a discount.
The discount currently stands at a maximum of 70 per cent, depending on the length of the occupant’s tenancy.
However, council homes have been purchased under Right to Buy at a much faster rate than local authorities have been able to replace them, resulting in a major shortage of social housing across the country.
This shortage is now recognised across councils and the Government as one of the UK’s most serious societal problems.
In Nottingham, the social housing sector has around 35,000 homes, with about two-thirds of these owned by the council and the remainder owned by other registered housing providers.
Over the last five years, the council has managed to increase its housing stock by around 800 properties through re-lets, new builds, and purchases, while registered providers have increased stock by a further 300.
Despite this, there are still more than 10,000 people on the city housing waiting list, and the council says there is “insufficient supply to meet the demand.”
Overall, between 1997 and 2023, it is estimated Nottingham’s social housing stock dropped by 20.4 per cent.
A new housing strategy now aims to address the problem alongside planned Government reforms to Right to Buy.
“A lack of good quality, affordable housing is one of the biggest issues facing our country and this city at the moment,” Cllr Linda Woodings (Lab), executive member for finance, said during an Executive Board meeting on Tuesday (October 22), where the strategy was adopted.
Earlier this year, Nottingham City Council was one of 20 councils to have written to the new Labour Government about its housebuilding targets, warning that without action they “face a £2.2 billion budget black hole in housing budgets by 2028.”
Cllr Jay Hayes (Lab), executive member for housing, said one of the primary concerns had been with Right to Buy.
He said in July: “Currently, when we sell a house through Right to Buy, we only get 40 per cent or less of that money back.
“It’s not just about that funding; it’s about how we can use the Right to Buy receipts. Under the last Government, we had to use it in five years or give it back with interest.”
Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, Angela Rayner (Lab), is soon expected to announce changes to Right to Buy.
These changes could include reducing the maximum discount to around 25 per cent, increasing the minimum qualifying period, and stopping new-build council homes from being purchased.
Some changes have already been made, including the return of £10.5m in Right to Buy receipts to the council.
The money had been paid to the former Conservative Government due to the five-year condition attached to the receipts.
Cllr Hayes and the council’s new chief executive, Sajeeda Rose, wrote to the Ministry of Housing, Communities and Local Government to request the money be returned following a relaxation of the condition.
The department agreed at the start of October.
“We also have incredibly welcome changes to the Right to Buy scheme, which give councils like Nottingham more flexibility in the funding of new homes, meaning we can, for the first time ever since Right to Buy was introduced, build one-for-one replacement homes,” Cllr Woodings added.
“We no longer have to borrow against our Housing Revenue Account to build replacement council homes.
“That is important when you consider that in Nottingham more than 50 per cent of our housing stock has been purchased under Right to Buy, but of that number, more than 40 per cent are now in the ownership of private landlords.”
The council says the £10.5m will now be used to build 100 new homes and flats for local people.