Rents will go up even more because of the Tories' planned council house sell-off, study finds

A study commissioned by local government finds the move will put pressure on the private rented sector

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Rents will rise even further in London because of the government’s plans to sell off council homes in the capital, according to new research commissioned by local government.

An academic study ordered by councils into Conservative plans found that many families would be unable to get affordable housing in the first two years of the policy.

The Tories have pledged a discounted sell-off of housing association homes under an extension of the Right To Buy scheme. They say the give-away will be funded by forcing councils to sell off the remaining high-value properties they own.

But researchers found lack of council housing caused by such a sell-off would in turn would lead to increased pressure on privately rented homes.

This would in turn push up rents for everyone who rents their homes from landlords, the researchers found.

“With Londoners already facing a huge housing crisis, this report shows that forcing councils to sell homes in high-value areas is likely to have a destructive impact right across the capital,” said James Murray, Islington Council’s executive member for housing, one of the commissioners of the report.

“Thousands of council homes would have to be sold, particularly in inner London boroughs, and the report underlines that there would be a big question mark over the Government’s promise that the homes would be replaced. We'll see a fall in the number of council lettings, which in turn will push up private rents even further, particularly in outer London boroughs.

“This report seems to confirm what we feared – that the Government's policy is wrong for London, both socially and economically, and will make our grave housing crisis even worse."

The interim study was commissioned by Camden, Islington, Enfield and Haringey councils and was conducted by Liverpool Economics, a research group which specialises in public policy economic modelling.

The report says in the first two years 385 homeless households would not be able to get a council home in the boroughs because of the government policy, as well as 579 families with children.

615 families with general needs would also likely be affected.

“There is therefore a strong likelihood of an increase in the requirement for temporary accommodation,” the paper readers.

“There is also likely to be a reduction in the flow of new vacancies in council homes as people remain in overcrowded or under-occupied accommodation rather than disrupt their support network.”

The researchers say the problems would occur because the money councils would receive would the sale would likely not be enough for one-for-one replacement, because any homes would take time to be built, and because they’d likely have to be built outside of the boroughs in question.

The Chartered Institute of Housing, which represents housing professionals, echoed concerns about the policy.

“Extending right to buy to housing associations is not going to tackle the housing crisis – in fact it could make things worse for people on lower incomes who are already struggling to access a decent home a price they can afford,” said Gavin Smart, the organisation’s deputy chief executive.

The Institute for Fiscal Studies said in an analysis in April this year that the Right to Buy extension would likely lead to more debt and fewer affordable homes.

“Sales of expensive [local authority] properties would reduce the availability of social housing in the most expensive areas, thereby creating clearer divisions between areas where richer and poorer households are located,” a summary of a research said.

Communities Secretary Greg Clark said: “Our Housing Bill will offer over a million people a helping hand onto the housing ladder. That is what a government for working people is about – making sure people have the security they need to build a brighter future for them and their families.”

Last year landlords put rents up by 8%, with even bigger rises in London, according to the English Housing Survey.