Councils in London will need to fork out £49m a year on average to fund government's planned extensions to the right to buy scheme, a report out today by Shelter has warned.
Under the right to buy extension, local authorities will be forced to sell off a proportion of their vacant council house stock on the open market, which will then be used to fund discounts for Housing Association tenants wishing to purchase their own property. The extended scheme expected to help 1.3m families buy their own home.
However, Shelter has warned that, in practice, the proposed plans means that London councils will have to raise a substantial amount from sales of council houses to keep the scheme ticking over. In particular, Southwark will need to raise almost £122m a year, while Camden would need to raise £116m a year and Wandsworth £99m.
Shelter also criticises the Housing and Planning Bill for not adequately ensuring that the homes being sold off will be replaced with comparable properties, and points out that only one house out of eight is replaced through the current right to buy scheme.
"With millions of families struggling to find a home they can afford, forcing councils to sell off huge swathes of the few genuinely affordable homes they have left is reckless," said Campbell Robb, Shelter’s chief executive. "While the small number of lucky winners from this policy will understandably be grateful for the chance to buy their Housing Association property, ultimately far more people will lose out and be left with no choice but expensive, unstable private renting.
"The government is out of touch on this issue, and running out of time to help the millions of ordinary people in London crying out for a home that they can actually afford."
The Department for Communities and Local Government, which brought the bill before parliament, has not yet responded to City A.M.'s request for comment.
The Public Accounts Committee last month published a report which remarked that "many key policy details have not been clarified" when considering the extension of right to buy and warned that the increases in the value of the discounts available "have increased the risk of abuse".
The Housing and Planning Bill is currently making its way through parliament, with the third reading at the House of Lords taking place on 27 April.