The government is considering a request from 50 local authorities to allow them to provide replacement homes for those lost under Right to Buy (RTB) legislation.
Treasury adviser Arlingclose has coordinated a request to new housing minister Alok Sharma to review the rules on the use of RTB receipts.
It is proposing a new model which would allow councils to spend the receipts on shared ownership homes bought from the open market—without having to find extra cash to fund construction.
Cecilie Booth, strategic director at Arlingclose, said: “Shared ownership is expressly excluded from the types of housing that RTB receipts can be spent on.
“This is an opportunity for the new housing minister to look at the rules and change them to increase the availability of housing.”
Figures released last month by the Department for Communities and Local Government showed that council homes are being sold off almost three times faster than local authorities can replace them.
Councils are only allowed to spend 30% of the receipts from RTB sales on replacement homes, and have to fund any gaps in meeting construction costs from other sources.
A cap on the amount that councils can borrow through housing revenue accounts means that some authorities find it difficult to spend their RTB receipts.
Under the Arlingclose proposals, RTB receipts could be used to pay for 30% of a home from the open market, with the new resident paying the remaining 70%.
The resident would pay rent on the 30% share owned by the authority, Booth said.
Booth said that 50 local authorities including Oxford City Council, Swindon Borough Council, Bolsover District Council and North East Derbyshire District Council, are currently supporting a consultation exercise with the Department for Communities and Local Government.
“The request to review current arrangements and the possibility of allowing RTB receipts to be used for open market shared ownership was submitted in June 2017, and we are eagerly awaiting the outcome. It is a simple idea and easy to implement,” Booth said.