The government should offer housing association tenants loans to help them buy their homes – rather than forcing councils to sell off their most valuable properties to fund an extension of the right-to-buy – Lord Kerslake has said.
The former Department for Communities & Local Government permanent secretary, and chair of the Peabody housing association, put forward the alternative to the government’s plan at a meeting of the London Assembly’s housing committee yesterday.
Under the current policy, extending the right-to-buy to housing association tenants would be funded by forcing councils to sell off their highest value homes. The meeting heard widespread opposition to the policy from councils.
Lord Kerslake proposed the right-to-buy should be offered in the form of an equity loan, similar to the help-to-buy scheme, instead.
“You still get assistance to help you buy but it’s done in a different way,” he told the committee.
He also backed calls to change the rules so that receipts from property sales in London are retained in the capital. This was one of London’s devolution demands to government, as revealed by LGC this week.
Lord Kerslake said he wanted to “engage” with the government about the alternative proposals but warned: “If that doesn’t happen we [Peabody] haven’t ruled out the possibility of legal action.”
London’s deputy mayor for housing Richard Blakeway indicated he was keen for those options to be explored and added there was “not a day when we don’t have some sort of dialogue” with the DCLG about the right-to-buy policy.
He claimed the capital could build two homes for every one sold If London was able to retain its right-to-buy receipts. That would not happen if funds were distributed nationally, he said.
Preliminary analysis by the Greater London Authority suggested between 3,000 and 4,500 council homes, and between 2,000 and 6,000 housing association homes, in the capital would be sold every year under the extended right-to-buy, said Mr Blakeway.
An LGC investigation into the impact of right-to-buy found the policy risked derailing some of the largest council house building projects in the country, including in Southwark LBC.
James Murray (Lab), Islington LBC’s executive member for housing and development, believed every home his council is currently building would be above the highest value threshold.
“The real threat of this is it could end our new build programme,” he said.
Hackney LBC’s cabinet member for housing Philip Glanville (Lab) said it would be “challenging” to replace the homes sold under the right-to-buy and indicated that it would be unlikely to be possible to do it on a like-for-like basis.
LGC reported in June that half of the 220 homes vacated by Kensington & Chelsea RBC’s tenants each year would be sold off. The council’s housing director Laura Johnson told committee members she was “very concerned” about the economic impact the policy would have as workers forced to move outside the borough might not be willing or able to return to their jobs in the area.