London Councils has outlined its concern that the government has chosen to inhibit councils from retaining all the money that is raised from the sale of council housing.
This concern comes alongside a warning that this decision will ‘undermine’ the efforts that are being made to replace council housing stock that has been sold.
The government has made the decision not to extend the policy of allowing councils to retain all of the Right to Buy sales receipts into the next financial year. As the 2023/24 financial year comes to an end this month, approximately 20-25% of the money that is raised through the sale of council housing will be transferred to the Treasury, rather than going back to the councils that can use investment to replace the homes that it has sold.
Executive Member for Regeneration, Housing and Planning at London Councils, Cllr Darren Rodwell, commented on the situation:
“With London’s homelessness crisis worsening and boroughs’ temporary accommodation costs posing a critical risk to their financial stability, it’s more important than ever to invest in new social housing.
“In the capital we have over 300,000 Londoners on waiting lists for a social home, but we’re also struggling with immense pressures on boroughs’ social housing budgets and viability challenges making housebuilding increasingly difficult.
“We’re therefore extremely concerned that the government will stop letting councils keep 100% of the money raised through Right to Buy sales. This will undermine boroughs’ resources for delivering desperately needed social housing and replacing stock lost through Right to Buy. The government should be doing everything it can to boost boroughs’ ability to invest in new social homes – but instead we could see our funding reduced.”
Despite Chancellor Jeremy Hunt announcing last week that local authorities will be able to fund an increased percentage of the cost of replacement council housing - something that London Councils welcomed – there is now a fear that boroughs across the capital will be left with less money available for house building than they would have been before.
Since the Right to Buy Scheme was introduced in 1980, more than 316,000 council houses have been sold in London, with a shortage of council housing leaving the ongoing homelessness crisis less likely to be tackled.
Currently, one in every 50 Londoners is homeless and living in temporary accommodation, whilst London Councils has produced analysis that shows how authorities are collectively spending £90 million every month on providing such accommodation.
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