London Right To Buy Income ‘Diverted’ To Treasury

Photo by Umbreen Hafeez

Photo by Umbreen Hafeez

Remember that promise the Conservatives made about replacing every home sold under Right to Buy with a new, affordable one?

Well, housing minister Brandon Lewis has admitted that between 2012 and 2014, the government diverted over £90m of RTB income from London boroughs to a general Treasury pot. Worse, it can’t (or won’t) explain how that £90m was spent. So that’s £90m which could have helped alleviate London’s affordable housing crisis which has essentially disappeared down a rabbit hole. RTB is a terrible idea anyway, but if we’re going to swipe £90m from the receipts for it, it would be nice to at least have some idea what it was spent on. It’s a pretty good argument for devolution though.

The Out of Stock (PDF) report by London Assembly Labour’s Tom Copley found that the capital’s councils expect to lose 1.5 homes for each new home they are able to build. In outer London this figure rises to two homes lost for every new home built. Copley said:

“Despite promising that Right to Buy would result in a new home for each one sold the last Government effectively stole £90m which was meant to be spent on new homes for the capital. As a result many councils are finding it impossible to replace their lost homes.

“London’s housing market is already in crisis, diverting money which was meant to be reinvested in new homes is a total betrayal. You have to wonder whether the policy was intentionally designed this way to reduce the number of council homes in London.”

If we’re going to hand council tenants nearly £104,000 to buy a house in the most overheated housing market in the country, we’ll be lucky if we have any social housing left at all in 10 years.

But what about all that new development in London? Developers have to comply with minimum requirements for affordable housing, right? Wrong. A Guardian report found that developers are essentially fiddling their numbers to wriggle out of their obligations, and the local authorities are rolling over and letting them get on with it.

In other housing news, London mayor Boris Johnson has announced four new ‘Housing Zones’ which are expected to provide up to 12,000 more homes for the capital. Situated in Havering, Enfield, Redbridge and Tower Hamlets, 3,500 of those will (hopefully) be affordable. It can’t come too soon — earlier in the week, it was revealed that the number of households in B&B accommodation has increased by 2,950 (31%) between March 2014 and March 2015.

Let’s just take a moment to think about that. Low income families can’t get social housing because it’s being sold off under RTB and councils can’t afford to build more, so they’re forced into the private rental market. As everyone has been reporting in the last couple of years, private rents are in a never-ending upward spiral while wages and benefits go in the opposite direction. Tenants are evicted because they can’t afford to pay their rent and end up homeless. The local authority is forced to put them up in emergency accommodation, at a cost more than £630m since 2010. It would be hard to find a clearer definition of lunatic short-termist policy.

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