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Thousands of council homes likely to be sold to fund right-to-buy extension

Around 3,500 council homes would have to be sold in three London boroughs in the first five years of the Government’s proposed new policy on the sale of higher-value council homes, a report estimates today.

Today’s Queen’s Speech includes plans to allow housing association tenants to buy the homes they live in at a discount under an extension of right-to-buy. This would be funded by councils being required to sell their higher-valued properties as they become empty.

The London boroughs of Camden, Enfield, Haringey and Islington commissioned research ahead of the Queen’s Speech to give a snapshot of how the policy could affect social housing in their four boroughs.

Estimated findings include:

• Around 3,500 homes can be expected to be sold across Camden, Haringey and Islington in the first five years of the new policy

• The sales of empty properties is not likely to be enough to pay for the right-to-buy discounts, to compensate housing associations for loss of asset, to build replacement homes and also contribute to a brownfield fund

• Even if the government's proposal for replacing homes works, there would be an estimated time lag of at least two years from the sale of homes to replacement ones being built. The report uses DCLG data to estimate that this would result in 579 families with children and 385 homeless households being unable to get a council tenancy in the first two years

• Many families unable to get a council tenancy would face the prospect of remaining in overcrowded homes, whilst households who are underoccupying would likely take remain in their home for longer before downsizing

• Homeless households would have to enter or remain in temporary accommodation. This is likely to have an effect on the private rented sector and on other council services in outer London boroughs as inner London boroughs rent homes for use as temporary accommodation outside of their own boroughs

Cllr James Murray, Islington Council’s executive member for housing, said: “With Londoners already facing a huge housing crisis, this report shows that forcing councils to sell homes in high-value areas is likely to have a destructive impact right across the capital.

“Thousands of council homes would have to be sold, particularly in inner London boroughs, and the report underlines that there would be a big question mark over the Government’s promise that the homes would be replaced. We'll see a fall in the number of council lettings, which in turn will push up private rents even further, particularly in outer London boroughs.

“This report seems to confirm what we feared – that the Government's policy is wrong for London, both socially and economically, and will make our grave housing crisis even worse.”

Haringey Council Leader Claire Kober said: “This counterproductive policy would choke the supply of new homes across London at the very time our city is battling a chronic housing shortage.

“Forcing councils and housing associations to sell off the few affordable homes that remain in areas where prices are skyrocketing will only serve to exacerbate – not resolve – the housing crisis.

“The government’s tight restrictions on reinvesting money from sales under the current Right to Buy scheme mean only one house has been built for every ten sold, so it’s unfeasible that extending the same policy will lead to a sudden rise in house building.

“The research shows that, far from helping families onto the housing ladder, this policy would leave the simple right to an affordable home further out of reach for many in London.”

Councillor Sarah Hayward, Leader of Camden Council said:
“This research seems to support our belief that the Government simply doesn’t believe people on lower incomes should be able to live in London.

"This policy will change the social mix of London for ever, yet our economy relies on people of all income brackets being able to support the businesses here. Forcing councils to sell will kill off investment, stalling house building and mean that London’s communities will no longer be mixed and vibrant.”

Enfield Council’s Cabinet Member for Housing and Housing Regeneration, Councillor Ahmet Oykener, said: “We would want the Government to ease borrowing restrictions on Councils so they can fund house building and allow Councils to build more houses.”