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Right-to-buy extension threatens council building plans

The government’s planned sell-off of high-priced local authority homes risks derailing some of the largest council house building projects in England, an investigation by Construction News sister title Local Government Chronicle has found

Southwark council in London, and Bristol and Oxford city councils – which had collectively expected to construct almost 13,000 homes - told LGC their plans could be thwarted by the government’s policy, which was formally announced in the Queen’s speech last month.

Under the Conservative policy, sale proceeds would help fund an extension of the right-to-buy to tenants of housing associations which now manage most social homes in England.

LGC’s analysis of responses from a dozen authorities found a wide variation in how the sales would affect town halls.

Inner London boroughs such as Southwark and Kensington & Chelsea would be the hardest hit with the latter predicting half of the 220 homes vacated by its tenants each year would be sold off.

Oxford predicts that one in four of its vacant homes could be sold off each year. Bristol was unable to provide a firm figure but said “less than 1,000” would become eligible.

Birmingham and Norwich city councils and Blackpool Council said none of their homes would be eligible for sale, based on the published regional ‘thresholds’ the Conservatives say could identify ‘high-value’ properties.

The research also reveals significant doubt about ministers’ claims that sales receipts will cover the cost of replacing the sold homes as well as compensating associations for their lost assets.

Oxford’s head of housing and property, Stephen Clarke, said the policy would “seriously adversely affect” its 10-year-plan to build an additional 1,000 council homes and improve its existing stock.

The forced sells offs would ultimately undermine the sustainability of  the city’s housing revenue account business plan, he added.

Richard Livingstone (Lab), Southwark’s cabinet member for housing, told LGC the policy would “drive a coach and horses” through its ambition to build 11,000 new council homes in the borough by 2043.

“Our very first new homes are to going to be let in the next couple of weeks. They would have to be sold [under the current proposal],” he added.

Daniella Radice (Green), Bristol’s assistant mayor for neighbourhoods, said selling some expensive properties was a “key part” of its own “asset management strategy”.

“These receipts contribute to the funding of our new build programme of around 70 new homes per year,” she added.

“A new commitment to compensating housing associations with a proportion of these receipts, as well as the largely unachievable ‘one-for-one’ replacement of a new property is likely to add yet more pressure to what is a very carefully balanced system.”

Councils chiefs were “extremely worried” about the impact of the enforced sales on local authorities, according to Graeme McDonald, director of the Society for Local Authority Chief Executives and Senior Managers.

“It’s going to have a significant effect in those areas that have already got the most serious housing supply problems,” he added.

The Housing Bill is expected to be published in the Autumn and will set out further details of the government’s proposals.

Housing minster Brandon Lewis said: “More council housing has been built since 2010 than in the previous 13 years.

“However, it is important that councils make the best use of their assets and manage their housing stock as efficiently as possible. So it is right that as high value council homes become empty they should be sold to fund new affordable housebuilding in the same area.” 

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