Sutton Council has spent over
£11 million buying back
Right to Buy homes
Calls to end the Government’s Right to Buy policy in London have been backed by Londonwide Assembly Member, Dr Fiona Twycross AM. This comes in the wake of a new report, Right to Buy: Wrong for London, published by Labour’s London Assembly Housing Spokesperson, Tom Copley AM. It has been revealed through a series of Freedom of Information (FOI) requests that Sutton Council has spent £11,766,950 buying back 44 homes sold under the Right to Buy. Dr Twycross has urged Ministers to scrap the Right to Buy, saying it is deepening the housing crisis in Sutton.
Responses to Freedom of Information (FOI) requests made to Sutton Council show that 429 council homes in the borough have been sold into the private rented sector, and that 29% of homes in the area, bought through the Right to Buy scheme, are now privately rented out.
According to the 2017 London Strategic Housing Market Assessment (SHMA), London needs 30,972 new low-cost rented homes every year. However, demand is continuing to outstrip supply, with just 7,905 low-cost rented homes having been built in the last five years.
In 2012, the Government decided to ‘reinvigorate’ Right to Buy, increasing the discount on council homes to £75,000 across England. The following year the discount was increased to £100,000 in London. The Government promised one-for-one replacement, within three years, on any additional homes sold due to the increased discount. By March 2018 the Government were falling behind on this pledge. Nationally, since 2012, 17,072 additional replacements were required, but the number of homes started or acquired was below 16,000.
The Mayor of London has pledged to start 11,000 new council and Right to Buy replacement homes by 2022. He has also introduced a new ‘ring-fence offer’ for London councils to protect their Right to Buy receipts. But in order to meet need, some councils are renting or buying back homes they had previously sold under the Right to Buy.
Londonwide Assembly Member, Dr Fiona Twycross AM, said:
“The evidence is clear- the Right to Buy policy has deepened the housing crisis in Sutton.
“It simply isn’t right that so many homes, originally built for the public good and to be let out at social rents, are now in the hands of private landlords, some of whom have used the Right to Buy scheme to bloat their property portfolios.
“We are in a progressively desperate situation where Sutton Council is having to pay big sums to buy back homes they were forced to sell at a discount under Government policy.
“We have a lot of local families stuck in unsuitable temporary accommodation or forced to pay sky-high rents in the private rented sector. Keeping the Right to Buy policy would be both irresponsible and unsustainable.
“Homeownership is of course important to many Londoners, but it should not come at any cost. I am urging Ministers to immediately act upon the stark findings of this report in order to protect our local housing stock”.
ENDS
Notes to editors
- The Right to Buy is a policy introduced in 1980 through which council tenants can buy their home at a discount, which increases with the length of time they have lived there. This can be a maximum of 70% off the value of the home, and the discount is capped in London at £108,000. The Right to Buy has been abolished in Scotland and Wales;
- Tom Copley AM’s report, Right to Buy: Wrong for London, can be found here;
- The data in Mr Copley’s report was gathered from a series of Freedom of Information requests to the 33 London local authorities in August 2018;
- Authorities were asked:
- How many residential properties they hold the freehold of;
- How many they hold the freehold of, but not the leasehold (this gives an indication of how many Right to Buy properties there are in a borough);
- How many of the above have a leaseholder with a different correspondence address to the property (which indicates that the owner is not a resident of the property.);
- How many individuals own the leasehold of 5 or more homes sold through Right to Buy in that borough;
- How many homes that the council owns the freehold but not the leasehold, does the council pay the landlord to use as temporary accommodation, and how much do they pay;
- How many homes has the council bought back that it had sold under the Right to Buy;
- Of these buy backs, if the council could provide the amount spent on to re-purchase the home, the original Right to Buy sale price, and the size of the Right to Buy discount (only a few local authorities were able to provide us with a full record of this information);
- All 33 boroughs (including the City of London) were sent the same requests. Mr Copley did not receive full responses from all 33;
- At least 10 boroughs did not give Mr Copley the responses required to estimate the full extent of Right to Buy properties now in the private rented sector, while the numbers provided may be an underestimate, as in some cases the local authority may have sold the freehold as well, and they may not have tracked the future ownership and tenure status of a property after the initial sale;
- According to the 2017 London Strategic Housing Market Assessment (SHMA), the capital needs 30,972 new low-cost rented homes every year to meet demand (47% of all new homes required). If this is taken to mean social rent levels or the Mayor’s new London Affordable Rent definition – in line with the new draft London Plan – the annual requirement for low-cost rented homes is several times greater than the total number of such homes that have been built in the past five years (7,905);
- In 2012 the Government decided to reinvigorate Right to Buy, increasing the discount on council homes to £75,000 across England;
- In 2013, the maximum Right to Buy discount was increased from £16,000 to £100,000 in London, and has risen with inflation each year to £108,000 in 2018-19;
- After reinvigorating the Right to Buy in 2012, the Government promised one-for-one (but not like-for-like) replacement on any additional homes sold as a result of the increased discount;
- By March 2018 the Government had fallen behind on its promise of one-for-one replacement. Nationally, since 2012, 17,072 additional replacements were required, but the number of homes stated or acquired was below 16,000;
- The Mayor of London has pledged to start 11,000 new council and Right to Buy replacement homes by 2022;
- Further information about the Mayor’s new ‘ring-fence offer’ can be found here;
- Dr Fiona Twycross AM is a Londonwide Assembly Member.