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London: Extending right-to-buy could ‘damage’ social housing

Tom Copley AM (pictured), chair of the London Assembly’s Housing Committee, explains why there is a lot of cross-party concern about the government’s plans to extend right-to-buy to housing associations in London.

In the 2015 Queen’s Speech the new government set out its plans to “dramatically” extend right-to-buy to the tenants of housing associations – a Conservative manifesto pledge that received widespread criticism from the housing sector ahead of the general election in May. 

Measures in the government’s Housing Bill as outlined in the Queen’s Speech would require councils to sell high-value council houses and put the money into building affordable homes. 

During a recent London Assembly Housing Committee meeting, Lord Kerslake, chair of the Peabody housing association, and until recently the permanent secretary at the DCLG, warned that the capital will not be able to solve its housing crisis if it in effect subsidises right-to-buy sales in other areas. “This policy as currently designed will see a very substantial outflow of funding from London to the rest of the country,” said Lord Kerslake. 

Following the meeting, Labour’s Tom Copley AM, chair of the London Assembly Housing Committee, told PSE that he believes extending right-to-buy to housing associations in London could cause “detrimental damage to the delivery of social and affordable housing, particularly for London, if it is a national scheme rather than a ring-fenced scheme”. 

“We are going to see boroughs like Islington and Camden essentially subsidising new housebuilding in the north of England,” he said. “Given that London has the most acute housing crisis, this doesn’t seem the most logical way of doing things.” 

Copley, elected to the Assembly as a London-wide list member in May 2012, said that forcing boroughs to sell off expensive council properties will cause huge damage to their ability to deliver their business plans and their ability to raise finance. 

“It will also impact on their ability to house people. Lots of boroughs are already having to house people in the private rented sector and this policy will only reduce their stock of housing,” he told us. 

The potential plans have also led to cross-party political “worry” across the capital, certainly at local government level. For example, the Labour leaders of Lewisham and Haringey councils and the Conservative leader at Wandsworth wrote to communities secretary Greg Clark MP saying the policy “could do long-term damage to the capital’s affordable housing supply”. 

Even Philippa Roe, leader of Conservative-dominated Westminster Council, admitted that the re-jigged initiative risks leaving boroughs unable to provide homes for people who need them. 

Not delivering 

The previous Coalition government promised that under a revitalised right-to-buy “every additional home that is sold will be replaced by a new affordable home on a one-for-one basis”. 

But housing charity Shelter highlighted that in the three years since this promise was made, DCLG figures show that for every nine that have been sold, only one has been replaced. 

Copley said: “We were promised one-for-one replacement on the reinvigorated right-to-buy; we have not seen that. We have seen one in 10 or one in eight depending on which figures you look at. Either way, it is not good. There is no reason to believe that the new right-to-buy would be any different. 

“And, in fact, the figures don’t really add up. The money from the forced sale of high-value council properties is meant to go on three things: replacing the housing association property, providing a discount for the housing association tenant; and providing money for the brownfield fund. I don’t see how it can stretch that far.” 

It is likely that inner London boroughs will find that every single new property they build is likely to be over the regional cap. It will mean that boroughs that actually are building homes are likely to just stop doing so, added Copley. “Because what is the point of them building if they immediately have to sell off the property.” 

The Housing Committee’s last meeting heard that if the policy goes ahead, the government would need to exempt new-builds. And there was even a suggestion of an equity share scheme rather than right-to-buy. 

The Commons Communities & Local Government Committee has also announced an inquiry into the viability and sustainability of housing associations, looking at the proposed extension of right-to-buy. 

Copley told us: “Nearly all the evidence shows that it is a policy that doesn’t work, no matter how you look at it. I think any work that is being done scrutiny-wise will highlight the flaws in the policy and either force the government to do a U-turn or at least put some measures in place to improve it.” 

After the summer recess, the Housing Committee will make recommendations on the issue for the mayor and the government.

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