🚨 Surge in Right to Buy Applications in London: Key Insights and Implications 🚨
In response to the government's October 2024 Budget announcement reducing Right to Buy (RtB) discounts, the London Housing Directors’ Group (LHDG) has assessed the significant impact this has had across the capital.
The result? A remarkable surge in RtB applications.
Key Stats:
💥From the Budget announcement on 30 October to the discount deadline on 21 November, 23 boroughs reported a total of 15,335 RtB applications had been received
💥 In just 23 days, boroughs received 12,040 RtB applications – a massive jump compared to the annual total of 3,566 RtB applications in 2023/24 (based on 18 boroughs).
What Does This Mean for London’s Housing Landscape?
The rise in RtB applications brings both opportunities and challenges over the next five years:
🔴 Financial Strain:
An increase in RtB completions will reduce projected rental income, creating financial instability for Housing Revenue Accounts (HRAs), unless additional resources are allocated.
🏠 Social Housing Shortage:
The loss of social housing units could cause delays in permanent rehousing for those in temporary accommodation, driving up costs as households stay longer in TA.
🔻 Long-Term Projections:
Some boroughs foresee a dramatic decrease in RtB sales in the coming years due to the steep reduction in discounts, making it unaffordable for many to purchase.
💸 Short-Term projections:
There will be a short term increase in receipts, providing additional resources for reinvestment.
⚖️ Workload & Financial Pressure:
Boroughs are grappling with a surge in applications, which poses a significant workload challenge. Despite securing extra resources, there are concerns about meeting statutory timeframes and covering unexpected financial costs, including valuations, legal fees, and administrative expenses.
In parallel, London Councils and the LHDG have been actively engaging with the government’s broader Right to Buy reform. In January, the LHDG supported London Councils in submitting a response to the consultation, advocating for the devolution of RtB policy. We believe that local authorities, rather than central government, should have the power to make decisions on eligibility, exemptions, and discount rates, enabling the scheme to better meet the specific housing needs of local communities.
Jamie Carswell Joanne Drew Sue Hannah Chloe Martin-Daplyn
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