The new chairman of Peabody Homes, Bob Kerslake, has not ruled out legal action against the government’s plan to extend Right to Buy
The former head of the civil service warned the housing association would look at challenging the controversial new government policy - which will allow housing association tenants to buy their homes - if talks with ministers fail.
Speaking at a public meeting at the London Assembly about the capital’s social housing situation, Kerslake said he hoped to engage with ministers including the secretary of state for Communities and Local Government, Greg Clark, over the details of changes affecting housing associations announced in the Budget.
Kerslake is particularly concerned about the financial impact the policy will have on housing associations’ finances and building programmes.
He said: ‘This policy has difficulty both in principle and practice - we will see a significant loss of affordable housing which will be very difficult to replace.
‘We should try to engage with ministers, however we haven’t ruled out taking legal action.
These aren’t the government’s assets to sell off
He added: ‘When Peabody was founded George Peabody put in about half a million pounds to build homes for the poor in London. That’s the equivalent of around a billion pounds now.
‘The point is that [these aren’t] the government’s assets to sell off.’
Kerslake advocated exploring alternatives to the current Right to Buy policy, which offers a cash discount on the market value of homes, and instead allow the government to offer equity loans which would be paid back after an initial five-year interest-free period.
Kerslake’s comments came during the second of two committee meetings held at the Assembly in which housing experts from London’s borough councils raised a number of concerns about the new policies, including the potential impact on the level of social homes in the capital and a potential outflow of money to other parts of the country as homes are sold off.
James Murray, executive member for housing and development at the London Borough of Islington warned the changes announced in the Budget could have a serious impact on the council’s ability to deliver housing in the future. He said: ‘It would be a real threat and could end our new build programme as every new home, once completed, are built to a high standard. It could mean that they are above the threshold and would have to be sold.’
Philip Glanville, cabinet member for housing at the London Borough of Hackney said: “We’ve all got our own plans to deliver affordable housing and this - along with other policies the government has introduced - has dropped a bomb on those plans, we are seeing a collapse in supply of social housing, even in Boroughs which are building as fast as they can.’
Tom Copley, chair of the housing committee, said: ‘Most people want to be able to own their own home – but as we heard from experts across the board today, there is a risk that this policy might make London’s housing crisis even worse.
‘As the government develops its plans it must ensure it does not penalise councils and housing associations: they are vital in boosting London’s housing supply - especially affordable homes.
‘London has its own affordable housing crisis and should not be used as a cash-cow for funding right-to-buy in other parts of the country.’
Kerslake mulls legal action to stop Right to Buy extension