The government’s proposed sell-off of thousands of affordable homes could add more than £4bn to the housing benefit bill over the next 30 years, Labour has claimed. The sum emerged from an opposition analysis of the housing bill, being debated this week in the House of Lords.
The bill calls for the sale of low-rent housing, which the housing charity Shelter has estimated will mean the loss of 19,000 council homes and 66,500 housing association homes.
“If you sell off genuinely affordable homes and don’t replace them, then people on lower incomes will be forced into more expensive private rented accommodation and this will mean higher housing benefit spending to cover the cost,” said John Healey, shadow secretary of state for housing.
“The Tories’ extreme housing and planning bill will make the deficit in affordable homes much, much worse. It’s an extraordinary assault on what used to be an uncontroversial ambition – that everyone in this country should be able to buy or rent a decent home.”
The government dismissed Labour’s claims as “entirely speculative”. “We have set out the most ambitious vision for housing in a generation, investing £8bn to deliver 400,000 affordable homes,” said a spokesperson for the Department for Communities. “The sale of empty high-value council homes will enable receipts to be reinvested in building new homes that better meet local needs, while housing associations have committed to replacing every home sold through right to buy.”
But Labour fears the bulk of the additional burden on housing benefit will come from the bill’s proposal to free private housebuilders from the need to include units for rent at below market rates. Instead they would provide “starter homes”, which will be sold at a 20% discount. Over the coming decades, this would mean the country had 85,000 fewer affordable homes, it said.
The government wants to extend the right to buy to tenants of housing association homes and is also keen for town halls to sell off their most valuable council houses. It has made a deal with housing associations that commits them to deliver one-for-one replacements, although not necessarily in the same area or immediately. In some cases they will be allowed to buy existing homes.
Labour argues that neither these homes nor the sold-off council houses will in practice be entirely replaced. It took Shelter’s predictions of net losses and calculated the extra burden on the housing benefit bill with the help of consultancy PriceWaterhouseCoopers.
“The number of genuinely affordable homes has plummeted and housing benefit is billions of pounds higher,” said Healey. “Over a million working families are now forced to claim support for their housing costs.”
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