More than 1,600 council homes in Camden and Haringey are predicted to be sold off over the next five years as a key legacy of Margaret Thatcher’s is extended to force councils to sell their most valuable houses.
The Tory government is to expand the Right to Buy scheme – which allows public sector tenants to buy their council homes at a discount – to include those living in housing associations.
It would see councils forced to sell their most valuable homes as they become vacant, with receipts used to build replacement housing.
But a report commissioned by Camden and Haringey councils has slammed the viability of the policy, claiming the cost won’t be met through the sale of homes alone – making additional borrowing for councils “inevitable”.
The report, authored by think tank Liverpool Economics, predicts 1,509 homes will have to be sold by Camden Council from its stock of 22,200 in the first five years, with Haringey Council forced to sell 115 of its 15,400.
The report warns the local authorities will struggle to find land to build replacement homes.
An estimated two-year lag time between any replacement homes being available could, the report also claims, mean hundreds of extra families and homeless people being denied a council home.
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.”
Cllr Pat Callaghan, Camden Council cabinet member for housing, added: “Right to Buy has already had an impact on housing available for those most at need in the borough. Forcing councils to sell will kill off investment, stall house building and mean that London’s communities will no longer be mixed and vibrant.”
The past five years has already seen a surge in the number of council tenants taking advantage of the Right to Buy scheme – leading to a significant transfer of wealth from public to private hands in north London.
Figures from a Freedom of Information request show that while just eight council homes in Camden were bought under the scheme in 2011, this rose to 137 council homes in 2014.
In Haringey, there were also just eight sales in 2011, increasing to 213 in 2014.
The rise coincides with a prior expansion of the scheme in 2012, boosting discounts to council tenants from £16,000 to £103,900.
With the market value of council homes sold in Camden between 2011 and May 2015 at £84million (at an average value of about £300,000), the council has lost more than £27m from discounts.
Cllr Oliver Cooper, Camden Conservative’s spokesman on housing, said the policy should be seen as a success.
He said: “It’s brilliant that more people are taking advantage of this scheme and if you speak to council tenants they are largely supportive of this policy. Labour has misunderstood the entire discussion on Right to Buy and they seem intent on denying people the opportunity to be homeowners.
“The success of the scheme is not dependent on a one-to-one replacement and it doesn’t reduce the ability of the borough to provide housing. With each council home sold it reduces the number of people in social housing and provides money for new housing.”
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