Social Housing Speed Read – The 2018/19 Statistics
9th December, 2019
This week, the Ministry of Housing Communities & Local Government released statistics in relation to house sales in the social sector for the period April 2018 – March 2019. We take a brief look at the report's findings, considering sales overall with a focus on Right to Buy.
The Bigger Picture
The report opens with an overall look at the percentage of social housing sales that have taken place in 2018/19 (19,389 to be precise). This figure represents a 12% decrease on the previous year and accounts for just 0.5% of the total social rented stock available at the beginning of this period. A decline in sales has now been experienced for the second year running.
It remains the case that local authorities (LA) process the majority of social housing sales, selling around 2,495 more homes than private registered providers (PRPs) over the past year. On more detailed analysis, LA sales amounted to 11,302, whilst PRPs sold 8,807 of their properties highlighting a decrease of 14% and 8%, respectively, on the previous period.
Right to Buy
Since its inception, Right to Buy has accounted for the vast majority of social housing sales. The initiative suffered a major hit in 2008/09 however when the financial crisis crashed the property market and sales across the board plummeted. However, a reinvigoration of the scheme in 2012 bolstered the sales for providers and figures have remained steady ever since with only slight fluctuation.
The most recent figures tell us that a total of 26,250 Right to Buy applications were submitted to LAs in the 2018/19 period. This represents a 4% decrease on the previous year but nonetheless, applications remain above the pre-invigoration level demonstrating continued improvement and an element of stability in the sector.
The majority of social housing sales still do occur via Right to Buy and account for 75% of overall sales. LAs remain the primary driver of Right to Buy sales however Large Scale Voluntary Transfer of stock from LAs to PRPs has provided tenants with the opportunity to purchase their property via preserved Right to Buy serving to increase PRP sales.
With regards to the percentage of discount offered on properties through Right to Buy compared to full market value, PRPs generally offer a higher discount to tenants. LA percentages have fluctuated at around 42% for the past couple of years, whilst PRPs have consistently increased the discount offered to tenants since 2016/17. The latest figures show that it now stands at around 54%.
Finally, it is reported that the average sale via Right to Buy of a LA property in 2018/19 is £63,370 (average market value £149,220) – more than double the 2011/12 average. Factors to take into account when considering this figure are the reinvigoration of the scheme seven years ago and the overall increase in house prices across the market.
The full report can be found here
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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