Shelter calls for end of 'right to buy' programme

The government will face demands today to suspend right-to-buy discounts for council tenants in property hotspots to combat soaring house prices.

The government will face demands today to suspend right-to-buy discounts for council tenants in property hotspots to combat soaring house prices.

The housing charity Shelter claims the policy has cost the taxpayer almost £4.5bn since Tony Blair came to power five years ago and has increased homelessness by reducing the stock of affordable homes.

The Government has announced an investigation into right-to-buy, which allows tenants to purchase their home at a discount of up to 70 per cent, amid reports that it has become plagued by fraud in some areas.

But in a strongly worded report, Shelter urged ministers to go further and temporarily withdraw the discounts in areas with severe housing shortages, such as London and the home counties.

The scheme should be postponed in the prosperous South-east, the charity argues, because of the rise in demand for housing since right-to-buy was launched by Margaret Thatcher during her first administration in 1980.

Since then, the demand for affordable housing has soared, with the number of homeless families living in temporary accommodation rising from fewer than 5,000 to 81,250.

Shelter said the nation's stock of social housing had shrunk by 750,000 since 1980 and it would cost more than £1bn to build new affordable homes to replace them.

Ben Jackson, a Shelter director, said: "Right-to-buy as it currently stands is a catastrophic waste of taxpayer's money. With one hand, the Government is giving away billions of pounds along with the nation's stock of affordable housing. With the other, it is having to spend billions on building new affordable homes to replace those sold under the scheme. "The right to buy is exacerbating a chronic shortage of affordable homes in many parts of the country."

Shelter said the Government's priority should be to stem the loss of social housing, particularly in the South-east, where the shortages were most severe and thousands of families were "experiencing the misery of homelessness".

Under the scheme, council tenants are entitled to a 32 per cent discount on the value of their home after they have lived in it for two years, followed by a further 1 per cent off for each additional year up to 60 per cent for houses or 70 per cent for flats. The discounts on both types of property are not allowed to exceed a set figure, which is £38,000 in London and the South-east.

Lord Rooker, a Housing minister, has denied the Government has a "secret agenda" to scrap the policy, but said it had not been designed to turn tenants into "absentee landlords", as many had become by sub-letting their homes.