A North-west arm's-length management organisation has predicted that soaring right-to-buy sales will slash its income by at least £3.5m every year.
First Choice Homes, which manages around 14,000 homes for Oldham council, has warned that the loss of income and government grant as a result of its falling stock numbers will force it to rewrite its business plan.

Right-to-buy applications at the ALMO have quadrupled from an average 200 a year in the 1990s to nearly 800 this year. Around 85% of applications result in sales.

First Choice loses an estimated £3500 a year in management and maintenance allocation and rental income for each home sold. Due to right-to-buy sales, the ALMO's annual income is now £3.5m less than was allowed for in its business plan.

More than half the applications have been for three-bedroom family homes, although these make up less than one-quarter of the stock. The sales are expected to cause long waiting lists.

Hugh Broadbent, chief executive of First Choice, said: "We will have to cope with a reducing income at a time when demands on our money are high.

"We are trying to get a three-star rating and we need to invest in quality but that is going to become ever more difficult."

Other Northern authorities have come forward with evidence of massively increasing right-to-buy sales, which are thought to be due to forthcoming changes in the system, rising house prices and increased confidence in regeneration areas. For example, Kirklees saw applications soar 70% from 2001/02 to 2002/03.

Broadbent, who has been working with the Northern Housing Consortium to gather evidence on right-to-buy across the region, said allowing councils to build again would solve the problem.

He said: "Councils are able to build quality, and these figures show there is certainly a demand for council housing."

Source

Housing Today