London Councils has welcomed the new relaxation of restrictions on how local authorities use the money raised through Right to Buy sales.
The cross-party group says policy changes announced by the government will provide a “shot in the arm” for London boroughs’ work to boost supply of affordable housing and tackle the capital’s worsening homelessness crisis.
The government has told councils they can retain 100% of Right to Buy receipts for 2022-23 and 2023-24. This marks a change from the previous rules on how local authorities could use the sales receipts, which saw much of the money returned to the Treasury rather than being available for building or buying replacement homes for homeless people in the community.
The government has also declared a two-year freeze on capping the number of existing homes councils can purchase using Right to Buy receipts. This will also help councils increase their social housing stock and provide homes for homeless residents, including households on housing waiting lists. London Councils expects this will be particularly useful for boroughs in the capital, since purchasing properties will often be a faster option for securing much-needed homes.
There have been about 300,000 council homes sold in the capital since the government introduced Right to Buy in 1980. London boroughs currently have 301,000 households on their waiting lists.
The most recent analysis by London Councils shows homelessness rates in the capital are increasing. The group estimates 166,000 Londoners – equivalent to the entire population of a city such as Oxford – are homeless and living in temporary accommodation arranged by their local borough. This figure includes 81,000 children, meaning one in every 23 children in London is homeless.
For many years London Councils has called on the government to remove restrictions on Right to Buy sales receipts, arguing that increased flexibilities are essential for supporting local housebuilding ambitions and improving the supply of new affordable homes.
Cllr Darren Rodwell, London Councils’ Executive Member for Regeneration, Housing & Planning, said:
“These new flexibilities will provide a shot in the arm for boroughs’ housing ambitions. We’ve long called for an end to all restrictions on how boroughs can use Right to Buy sales receipts. It is crucial that every penny raised from council house sales is available locally for replacing those homes.
“In the face of London’s worsening homelessness crisis, boroughs urgently need more resources for securing the affordable housing our communities are crying out for. The capital’s housing pressures are the most severe in the country. This intervention is welcome, but we will continue to work with ministers to ensure boroughs get the long-term policy and funding support required for ending the homelessness crisis altogether.”