Sadiq Khan: Housing associations could raise £870m in year through right-to-buy sales

Right-to-buy call: Sadiq Khan (Picture: Matt Writtle)
Pippa Crerar14 October 2015

Sadiq Khan today claimed London’s housing associations could raise £870 million in a year from selling properties under the right-to-buy scheme as he called for the money to stay in the city.

The Labour mayoral candidate warned that London could lose enough cash to build 35,000 new homes if the Government’s plans went ahead.

He said it was “unacceptable” for millions of pounds from selling social housing in London to be spent on new developments miles from the capital.

It comes after housing minister Brandon Lewis failed to guarantee that the proceeds of the sell-offs would be used to build new homes in London.

The Government has faced a wave of criticism of the plans in its Housing Bill to extend right-to-buy to housing association tenants, which will be partly funded by forcing town halls to sell expensive council properties.

Mayor Boris Johnson is also adamant the funds raised should not be siphoned off to pay for housing developments in other parts of the country.

Mr Khan said that if elected next May he would expect all money raised under the scheme to be reinvested in the capital, which faces the worst housing shortages across the UK. He met David Orr, chief of the National Housing Federation, which represents housing associations, for a “forthright” meeting at Westminster earlier this week.

He warned that City Hall cash for new housing schemes would be dependent on housing associations ploughing the sales funds back into London homes.

The Tooting MP said: “I’ll be a mayor who stands up for Londoners. The housing crisis is the biggest challenge facing the city and the Government’s plans will only make things worse.

“It’s unacceptable that millions of pounds from selling off housing association properties in London could be spent on new homes many miles away from the capital.”

Last year London councils sold more than 4,000 properties, out of a total stock of 406,000, through right-to-buy. This raised £472 million, the equivalent of £115,000 for each property. As discounts applied, their full market value could be up to £220,000 each.

If a similar proportion of housing association homes were sold off under the new plans, a further 4,000 properties would go, generating £868 million, according to Labour. The pressure is now on Tory mayoral candidate Zac Goldsmith to detail his views on the Housing Bill before it begins its passage through Parliament.

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