Sadiq Khan has challenged ministers over their Housing Bill by tabling an amendment that would ring-fence the expected annual £865 million raised from Right-to-Buy by housing associations in London.
There are almost 400,000 housing association homes in London that are at risk of being sold off and not replaced under the government’s plans.
The 'Khan Amendment' would require housing associations to replace homes sold off under the Right-to-Buy scheme with a new like-for-like home in the borough, preventing the hollowing out of local areas.
There are concerns that hundreds of millions of pounds raised from selling off social housing will flood out of London and not benefit communities here. With no guarantee of homes sold off being replaced locally, there are also fears that the already insufficient supply of available social housing will dry up.
Sadiq Khan's amendment – due to be debated in the Commons on Tuesday 1 December – will require that:
- If a housing association sells a home for social rent, it must be replaced with another home for social rent in the same borough.
- All the money raised from housing association Right-to-Buy sales in London will stay in the capital and be re-invested in affordable housing for Londoners.
Sadiq Khan, Labour’s candidate for Mayor of London, said:
“Housing associations in London will raise a huge amount of money, more than £800 million a year, from offering their tenants the Right-to-Buy. I'm demanding that if they're selling homes then they have to build more homes locally to replace them. Housing associations will have to put all the money they raise back into affordable homes for Londoners.
“Without the guarantees I'm proposing, money will flood out of the capital, our city will be hollowed out, the housing crisis will get worse and it is Londoners who will suffer.”
Notes to editors
The Housing Bill sets out how housing associations will be paid grants to cover the cost of discounts offered to tenants under the 'voluntary' extension of the Right-to-Buy to their tenants. Clause 57 (below) gives power over grants to the Mayor of London for homes sold in London.
Clause 57 (Grants by Greater London Authority):
(1) The Greater London Authority may make grants to private registered providers in respect of right to buy discounts for dwellings in London.
(2) A grant under this section may be made on any terms and conditions the Greater London Authority considers appropriate.
Sadiq Khan has tabled an amendment to this clause (below) to require that if housing associations want to be paid for the Right-to-Buy discount they offer their tenants, they must re-invest all the money raised through the sale in building new affordable homes in London, including a guaranteed genuinely-affordable replacement home in the local borough.
Sadiq Khan Amendment:
Clause 57, page 24, line 18, at end insert—
(3) The conditions at subsection (2) must include a condition that money equivalent to the market value (disregarding any discount) of a dwelling sold under right to buy and to which the grant applies is spent by the private registered provider on the provision of affordable housing in London, including at least one new home replacing that sold which is
(a) of the same tenure;
(b) located in the same London borough; and
(c) in accordance with assessed local housing need.”
If a housing association cannot guarantee a replacement home in the same borough, they are free under the principles in their agreement to voluntarily extend the Right-to-Buy to refuse to sell a particular property. Their voluntary offer states that "The housing association would have discretion not to sell the home under particular circumstances... such as where the property in question is particularly difficult to replace". (Chapter 1, Part 2 - http://nationalhousingfederation.newsweaver.com/icfiles/1/55885/161177/5359868/a266db71336fb8bfef6fbbf2/rtb%20offer%20final%20fed_2.pdf)