Town Hall on property ladder to cut landlords bill
Islington Council plan to use receipts from right-to-buy sales to acquire flats needed as temporary accommodation
15 June, 2018 — By Samantha Booth
Labour housing chief Councillor Diarmaid Ward: ‘As far as I’m concerned, the more housing we own the better’
THE Town Hall is to embark on a programme of property buying in a bid to ease the housing crisis.
Islington Council says it will spend receipts from right-to-buy sales on flats needed as temporary accommodation.
The move is aimed at slashing the amount of money spent on the accommodation, a figure which stretches to around £10million a year. About £8million of that went to private landlords for emergency accommodation in 2016/17.
Labour housing chief Councillor Diarmaid Ward told the Tribune: “As far as I’m concerned, the more housing we own the better. If we can own our own temporary accommodation, that’s always better than paying out to private landlords, as we’ve got control of it.”
The strategy comes with a warning, however, with council chiefs conceding that Islington’s expensive housing market could force officials to look at properties beyond the borough boundaries.
Right-to-buy has been a historic source of debate, splitting those who believe tenants deserve the chance to buy their council homes and critics who say the system – introduced by the Tory governments of the 1980s – erodes the number of homes in council stock.
Cllr Ward said that using the money collected from right-to-buy sales had been hard due to restrictions: it has to be spent within three years and can only be used to foot a third of the bill when building a new council home. This has, however, led to an “excess” in the receipts in Islington.
Cllr Ward said of the property-buying programme: “I’m not aware of any other councils doing it, but there may well be.”
The Labour council has brought many of its services in-house, such as waste collection and housing repairs. The property-buying initiative could see the council cutting ties with private contracts it holds for temporary accommodation. It hopes to add as many as 88 properties to the 25 it already owns, as well as three reception centres with single self-contained rooms.
However, a report that went before the executive last night (Thursday) says that, because of inflated house prices in Islington – average value of flats sold in 2017 was £595,000 – it is recommended that, while the council focuses efforts on property within the borough, it should look elsewhere in London too.
The report states the average cost of a flat in Haringey is £490,000, in Hackney £507,000, in Enfield £309,000 and £472,000 in Barnet.
In previous years, tenants in temporary accommodation were sent to many London boroughs and to areas around the M25.
Cllr Ward said: “If I could, I wouldn’t want anyone to be in temporary accommodation outside the borough. Unfortunately, the financial realities are that we do sometimes place people outside the borough.”
He added: “When we do this, we try to make it as close as possible, so some in Haringey, Enfield. The unfortunate reality of the housing shortage is that we are not always able to accommodate people in the borough, but we will do it as much as we possibly can.”
Association of Retained Council Housing chief executive John Biddy said the property-buying move sounded “sensible”.
“It’s a bit of a win, win,” he added. “In London, the situation is at crisis point with the numbers in temporary accommodation. Any reduction in the amount spent by councils on private landlords becomes quite significant.”