Figures show that 1,045 council homes have been lost in Tower Hamlets through Right to Buy sales since 2013. The Mayor has called for greater freedom to spend Right to Buy money on new council homes, as currently the council can only use 30% of this money when delivering any replacement council homes.
Government rules mean council tenants can purchase their properties through Right to Buy and the sales since 2013 in Tower Hamlets have generated £113m.
However the current restrictions mean Tower Hamlets has to stump up the remaining 70% when spending these receipts and only has a three year period to spend this, so in total Tower Hamlets had to find £264m to make up the shortfall to a total investment of £376m. Another restriction is the recent £13m received from the GLA for home building cannot be used in conjunction with right to buy receipts.
The council faces a further spend target of £144m by March 2019 and £376m by March 2022 to keep up and ensure it doesn’t lose these receipts. The Mayor has cautiously welcomed government plans to relax the time restriction on the spending and to increase the restriction to 50%. The Government recently consulted on changing the current rules and fuller proposals will be published as part of the social housing white paper.
However Mayor Biggs has called for the government to go further so the council can spend 100% of its Right to Buy receipts on replacement council homes.
Mayor of Tower Hamlets John Biggs said:
“I call on the government to free our hand so we can invest the revenue from Right to Buy back into council homes. We have 19,000 people on our waiting list and so any loss of council homes needs to quickly lead to a like-for-like replacement, however the current restrictions in place make this difficult.
“I’m delivering new council homes at genuinely affordable rents, and am committed to delivering 2,000 new council homes.”
Cllr Rachel Blake, Deputy Mayor and Cabinet Member for Regeneration and Air Quality for said:
“We need to defend our council housing. We have an ambitious home building programme, but when we are also losing council homes at this rate, we are running to stand still. Removing the borrowing cap goes some of the way to giving councils the freedom to build, but reforming the bizarre Right to Buy restrictions is critical to releasing much-needed funds for homebuilding.”