Government determination to extend right to buy will cost Hackney Council over £90 million a year, homelessness charity Shelter has warned in its latest research.
As part of its 2015 general election manifesto, the Conservative Party committed to extending the Right to Buy to tenants in Housing Associations, “putting home ownership within the reach of 1.3 million more families”.
To fund the discounts for housing association tenants, local authorities will be forced to sell off some of their most valuable council houses on the open market.
Research published by the housing charity Shelter puts Hackney as the fifth hardest hit borough in London, estimating that the council would have to sell off £90 million worth of council homes per year to reach the government’s estimated cost of the Right to Buy policy. This figure is well above Shelter’s estimated average cost to London boroughs of £49 million.
Campbell Robb, Shelter’s Chief Executive, said: “With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.
“Whilst the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property. Ultimately, far more people will lose out and be left with no choice but expensive, unstable private renting.
“The government is out of touch on this issue, and running out of time to help the millions of ordinary people in London crying out for a home that they can actually afford.”
This week, housing minister Brandon Lewis said that the government would make no further concessions to the Housing Bill, which has been passed back and forth between the House of Commons and Lords.
A spokesperson for Hackney Council, which is majority Labour, said: “We share Shelter’s concerns about the council being forced to sell its housing stock to fund the Right to Buy extension, and we have continually requested more detail from government on the value threshold for forced sale and how much of the proceeds we will be able to keep to fund new homes.
“Our modelling indicates that we will have to sell up to 700 homes over the next five years to pay for the new Right to Buy discounts. Any replacement homes that might be built will not be in place when our homes are sold.
“This is in a context where we have more than 2,400 households in the borough living in temporary accommodation because we are unable to house them.
“The Council may also need to spend an extra £18 million on housing-related costs due to the likely increasing numbers of families living in temporary accommodation and their longer wait for a home.”