Selling off expensive London council houses 'could raise £70bn'

More than £70bn of expensive social housing in London should be sold off to pay for a new wave of housebuilding, a report has recommended.

Placing the highest-value council properties on the market when they become vacant would generate £4.5bn to construct up to 170,000 social homes a year, think tank Policy Exchange’s report says.

One in five properties in the social housing stock are worth more than the average house price in the area, the Ending Expensive Social Tenancies report says.

The 816,000 homes which fall into this category are worth a total of £159bn, while £71.9bn of this stock is in London. Given that about 3.5% of buildings become vacant each year, after debts are paid off, selling them would raise £4.5bn.

Policy Exchange, which was set up by Conservative MP Nick Boles, claims introducing such a policy would cut the housing waiting list by as much as 600,000 in five years.

Money raised by the system should be used to build additional homes and the report recommends bringing in spending floors to make sure standards are driven up in the quality of stock.

The report’s author, Alex Morton, said: “Expensive social housing is costly, unpopular and unfair. That is why almost everybody rejects it.

“Social housing tenants deserve a roof over their heads but not one better than most people can afford, particularly as expensive social housing means less social housing and so longer waiting lists for most people in need.”

The demand for new homes continues to push housing up the political agenda, while politicians and experts are of the belief that construction is a good way to kick-start economic growth.

Steve Turner from the Home Builders Federation said: “Any way that can raise money to be spent on much-needed housing would be welcome.

“We know we need to build more. We know building houses is a driver for economic growth and jobs. It is up to the government to work out how best to raise revenue to do that and decide on the policies that allow it.”

Turner added: “There was a report out last week about the amount of land owned by the public sector in London and it identified significant amounts.

“There is land, what is important is sorting planning out so you can identify this land and make it available.”