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Sadiq Khan Mayor of London
Navin Shah GLA Brent & Harrow
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Navin's News: Right to Buy homes

How many Right to Buy homes in Brent and Harrow are now privately rented?

New research has for the first time revealed that at least 36% of homes sold through Right to Buy in London are now let by private landlords, with 25% in Brent and 35% in Harrow.  The information was released in a new report released From Right to Buy to Buy to Let.

The report highlights the financial cost to taxpayers and local authorities of the Right to Buy, including increased welfare spending due to the higher Housing Benefit payments being paid to tenants in ex-council homes that are now charged at market rates. In some London boroughs, average Housing Benefit claims are as much as £100 a week – £5,200 a year – higher for private sector tenants than for council tenants.

The report also highlights that local authorities are now frequently forced to rent former homes back at higher market rates in order to discharge their statutory homelessness duties.

The report calls for urgent action to reform Right to Buy to alleviate some of the worst excesses caused by the policy in its current form.

The report’s recommendations include: 

  • Mandatory covenants on all Right to Buy properties so they cannot be let through the private rented sector.
  • The current system of discounts should be abolished.
  • A new system should be introduced whereby local authorities retain an equity stake in any property sold.
  • Local authorities should have a ‘right not to sell’ if it is not in the community interest to do so or if they believe it would harm their housing operations.
  • Replacement homes built with Right to Buy receipts should mirror the rent, size and tenure specifications of the home sold

The report shows for the first time that Right to Buy, a policy ostensibly about helping aspiring home owners, has led to tens-of-thousands of London’s former council homes being rented out by private landlords. This has helped to fuel the increase in the housing benefit bill, heaped more pressure on local authority waiting lists and led to more Londoners being forced into the under-regulated private rented sector.

This shows that Right to Buy is poor value for money to taxpayers. Not only did they pay to build the home in the first place, they then subsidised the considerable discounts offered to tenants and then missed out on the rental income that would have covered the build costs. Now, we have the indignity of London boroughs renting back their former council homes at higher market rent levels, once again costing taxpayers through the nose.

Right to Buy has played a central role in causing and exacerbating the current housing crisis. Future governments must recognise that the right of a council tenant to buy their home at a discount, subsidised by other taxpayers, cannot be at the expense of the right of the vast majority of people to have a decent, affordable home to live in.

Physical conditions in London’s private rented sector are worse than any other tenure of housing, while complaints against private sector landlords have increased by 47% since 2008. Median private sector rents increased by 12% in 2011 and 9% in 2012.

 

Ends

 

Notes

  1. Reference for the above data on physical conditions in London's private rented sector is taken from: ‘Rent reform: Making London's private rented sector fit for purpose’, London Assembly Housing and Regeneration Committee, June 2013:http://www.london.gov.uk/sites/default/files/Rent%20Reforms%20-%20Making%20the%20Private%20Rented%20Sector%20Fit%20for%20Purpose%20Final.pdf
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15th January 2014