London boroughs to lose two thirds of social homes

Lord Kerslake, the former chief executive of the Homes and Communities Agency and former head of the civil service, has said the London boroughs of Wandsworth, Westminster and Kensington and Chelsea could lose nearly two-thirds of their social housing stock under the government’s plan to extend right to buy to housing association tenants.

He said the government’s proposed extension of the scheme was “wrong in principle and wrong in practice” and that it could cause £5bn of funding to flow out of London to lower value areas where the demand for housing was not as high.

Addressing the House of Lords, Kerslake said the councils could “stand to lose nearly two thirds of their stock” if forced to sell their highest value properties under the policy.

The expansion of the right to buy scheme was announced in the Queen’s Speech last week. It involves plans to provide housing association tenants with subsidies of up to £100,000 to buy their home, funded by the sale of high value council-owned properties.

The bill also included measures to build 200,000 starter homes.

Kerslake added that a “one-size fits all approach” was contrary to the spirit of devolution and that the unintended consequences would be “a substantial flow of funds out of London, potentially of the order of £5bn, to other parts of the country, to make the numbers balance.”

London boroughs in particular, where housing needs are acute, he noted, would find it almost impossible to match the number of sales with new-build affordable homes.

Last week Brendan Sarsfield, chief executive of housing association Family Mosaic, and a member of the influential G15 group of developing housing associations, called plans to pay for the measure by forcing councils to sell off homes “mad”.