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Right to Buy sales set to outstrip supply of new council homes in London new research finds

 

·         Right to Buy (RtB) is depleting London’s housing stock as report finds councils set to sell more than they build

·         Across London, councils predict they will lose 1.5 council homes for every 1 they build

·         In Outer-London there are set to be twice as many RtB sales as new council homes built over next decade

A new report launched today (Tuesday) by London Assembly Labour Housing Spokesperson Tom Copley AM has found that the capital’s councils expect the number of homes sold under the Government’s reinvigorated Right to Buy scheme to far outstrip the rate they are able to build replacements over the next decade. Mr Copley said the ‘Out of Stock’ report found a “devastating scale of reduction in council housing stock” and called for councils to be given new powers to properly invest in new social housing.

Drawing on new data provided by London boroughs the report estimates that based on current development plans around 10,300 council homes will be completed over the decade to 2023/24, compared to an estimated 16,100 Right to Buy sales leaving almost 6,000 fewer council homes by 2023/24.

The data shows that London boroughs expect 1.5 council properties to be sold over the next ten years for every new home that will be built. The erosion of the council housing stock is expected to be particularly stark in outer-London, where the boroughs currently forecast that two homes will be sold for every new home that is completed. This compares to 1.2 homes in inner-London.

The figures, based on London boroughs’ expectations of future council housing sales and completions, show that annual council housing completions are likely to peak at a level just below 1,900 in 2015/16, before declining starkly. This compares unfavourably to the pre-1980s peak of 27,235 council homes built in 1970.

The report also found that only 43 per cent of the revenue raised from RtB sales is expected to be spent on building new homes, while 30 per cent will be transferred to central Government, with the remainder being allocated to cover administrative costs.  The result is councils being forced to top up funding to reinvest in new homes despite rapidly diminishing budgets and central government imposed restrictions on their ability to invest in housing.

The Out of Stock’ report follows Mr Copley’s ‘From Right to Buy to Buy to Let’ report, published in January 2014, which found that at least 36 per cent of London’s former council homes that were sold through Right to Buy are now let by private landlords, with one borough seeing more than 50 per cent bought for private lets.

Mr Copley said the scale of expected reduction of almost 6,000 homes over the decade to 2023/24 illustrated the urgent need for councils to be given more powers to finance new social house building. As part of a comprehensive package of recommendations in the report Mr Copley calls for councils to retain all receipts from Right to Buy sales for reinvestment in new homes as well as for the HRA borrowing caps to be lifted to maximise the finance available to councils for house building.

London Assembly Labour Group Housing Spokesperson Tom Copley AM said:

“The housing crisis London faces risks leaving hundreds of thousands of families languishing for decades on council home waiting lists. The Government’s reinvigorated Right to Buy scheme is leading to a devastating scale of reduction in council housing stock adding yet more strain to the demand for affordable accommodation.

“With Right to Buy sales set to outstrip replacement builds over the coming decade Londoners will see the amount of social housing dropping despite unprecedented demand and population growth. The only way to avert a decade of decline in London’s social housing stock is for the Government to take urgent action to unlock new funding streams for councils and ensuring that all income from Right to Buy sales is reinvested to build new homes.

“We also need to see a concerted effort from the Mayor of London to attract new investment for housing, particularly affordable homes, to increase supply. We need to be looking at new ways of generating investment in new council housing, including a new Housing Investment Company that is backed by the Mayor of London, better channelling of overseas investment into new developments and by establishing a city wealth fund.”

 

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