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Thousands of London council homes to be sold to fund Right to Buy

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Four London boroughs have warned that more than 3,500 council homes will need to be sold to fund the government’s controversial Right-to-Buy extension

Before the general election the Conservatives pledged that the extension of right to buy discounts would be paid for through the enforced sale of ‘high-value vacant council houses’.

However Camden, Enfield, Islington and Haringey Councils have said they would struggle to find the funds or land to build enough like-for-like replacements homes if there was a mass sale of housing association properties as set out in the Queen’s Speech on Wednesday.

A statement by Camden Council added that the sales of empty properties was unlikely to cover ‘the right-to-buy discounts, to compensate housing associations for loss of asset, to build replacement homes and also contribute to a brownfield fund’.

The borough said: ‘Even if the government’s proposal for replacing homes works, there would be an estimated time lag of at least two years from the sale of homes to replacement ones being built.

‘The report uses DCLG data to estimate that this would result in 579 families with children and 385 homeless households being unable to get a council tenancy in the first two years.”

The government intends to bring in legislation as part of a new Housing Bill which will extend Right-to -uy to up to 1.3million Housing Association tenants, who wil be entitled to buy their own home with discounts of up to £103,900 in London.

The comments from the London boroughs come as the chief executive of the Brick Development Association (BDA) said that the policy could scupper plans for public sector housing.

Simon Hay said: ‘The government has stated that we need to build around 200,000 new houses each year to meet demand.  We desperately need our Housing Associations to be contributing to this total, but extending the Right to Buy will have a huge impact on the funding available for them to do so,” he outlines.

‘Investing in building new social housing, with a stable return of around 4-6 per cent over the long term is a potentially an attractive investment proposition for organisations such as pension funds.  But this model is blown apart if the assets must be sold at below market rate on demand.”

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