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Cllr John Moss is a councillor in Waltham Forest and a former Parliamentary Candidate.

Sadiq Khan has failed miserably to deliver on the building of new homes in London. We are now three months beyond the point that his term of office was supposed to come to an end. But he has not even begun to build half of the 116,000 new homes he promised to deliver at the beginning of his Mayoral term. This despite getting a record grant from the Government of almost £5 billion to do so.

He now has his begging bowl out again, asking for more money to keep these projects alive. But why should the Government throw even more money at him when he has clearly failed?

Instead, the Government should look to organisations that are actually delivering homes. Councils and Housing Associations.

Councils in London have received more than £2.75 billion from Right to Buy sales since the scheme was re-invigorated in 2012. However, they have only built just under 10,000 replacement homes with this funding. And the delivery rate is slowing, down to under 400 from a peak of nearly 900 in 2017/18. Councils were badly affected by George Osborne’s policy of cutting rents by one per cent a year announced in 2016 and this played a big role in councils shelving many of their plans. But a bigger factor is that they are barred from funding more than 30 per cent of the construction cost from these receipts.

I argued with Gavin Barwell in 2016 that the effect of the rent cut could be offset by allowing councils to fund 50 per cent of the cost from RtB funds. Even with the rent regime restored to sanity, this is still a good idea.

In addition, the Government should give grants directly to councils. Cut out the middleman Mayor. These grants, together with the long-term, low-interest rate loans that councils can access, would comfortably cover the other 50 per cent of construction costs.

Specifically, for London, I would also remove the cash cap of £112,300 from Right to Buy discounts, but limit this to 50 per cent of value. Against this, a stronger and stricter clawback policy would need to be included in the terms of those sales. However, this would potentially increase the number of sales in higher value locations and in doing so increase the funding available to build new, available homes where they are most needed.

The Government should also offer a similar deal to Housing Associations. If they can build, give them the grants directly that they now have to apply for from the Mayor, and offer them the same long-term, low-interest rate loans that they currently give to councils through the Public Works Loan Board.

The Government could then lever another policy off this offer.

There have been valiant attempts to extend Right to Buy to Housing Associations, but these have fallen foul of Government accounting rules and a concerted effort to lobby against the change. However, it remains a good thing to allow people who want to buy the home they live in, rather than forcing them to incur the cost of moving. The Government could, as a condition of those loans, require HAs to offer a Right to Buy scheme of their choosing.

One option that could be explored is a “rent to buy” scheme operating like a repayment mortgage. In simple terms, tenants would be encouraged to overpay their rent by a small amount, say £100 a month. This amount would be matched by the Government and the Housing Association and converted to an equity stake at the end of each year. This, in turn, would reduce the amount of rent the tenant was liable for, so helping to increase the overpayment. Overtime, the tenant transitions through shared ownership to being a full owner, the Housing Association has, probably, got its money back and the Government has helped another household fulfil the dream of home ownership.

Cut out the middleman Mayor, go straight to the people who want to build, and help people who want to buy their home. What’s not to like?

36 comments for: John Moss: Khan has failed to deliver on housing. The Government should switch to funding the London boroughs instead.

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