Northern business plans in peril as tenants snap up homes

Right to buy sales in the North of England have more than doubled, overtaking sales in the South and Midlands for the first time.

ODPM figures show that right to buy sales in the three Northern regions rose from an average of 11,000 per year between 1993 and 1999 to more than 24,000 in 2002/3. In the South in the same year, there were fewer than 20,000 such sales.

And new figures compiled by the Northern Housing Consortium show how some councils have been hit hard: for example, Ellesmore Port & Neston Borough Council, which has 6800 homes, has seen sales rocket from 120 in 2002/3 to 341 in the first half of 2003/4.

Possible reasons for the increase in sales include persistently low interest rates, property speculation and the refurbishment of social housing to meet the decent homes target.

The sales have already led to a shortage of decent homes to let in some areas of the North and will have grave implications for social landlords' business plans.

Paul Stubbings, principal housing officer at Ellesmore Port & Neston, which has applied for stock transfer, said: "We don't know how many homes a transfer association would have so we don't know what revenue it would have."

He added that initial projections for a transfer housing association would have to be redone in the light of the rising sales.

However, a spokeswoman for Hull council said Hull, which has seen the highest rise in the survey (left), "did not anticipate a problem".

Hugh Broadbent, chief executive of First Choice Homes ALMO in Oldham, revealed last month that rising sales have already slashed its income by at least £3.5m per year through lost rent and grants (HT 16 January, page 12).

At his request, the Northern Housing Consortium compiled figures showing the level of sales across the region. The figures show that Oldham's experience has been mirrored across the three Northern regions.

The Northern Housing Consortium will decide what action to take at a meeting on 27 February.