London's largest landlord may need to reduce stock
The largest council landlord in London should look at reducing its housing stock by almost half to generate more cash for investment, an independent report says.
The council-commissioned review released today recognises Southwark Council’s 39,000 homes are ‘of poor quality’ and ‘ageing fast’ and there are ‘no quick fixes’ to improving the homes.
It warns ‘sustained levels of investment will be needed to bring and keep council housing up to acceptable standards’. It says maintaining Southwark’s stock at the current level for 30 years ‘would necessitate a substantial and sustained refurbishment and new-build programme’.
Investing in council housing: options for the future suggests three possible options for Southwark:
- A sharp reduction in stock, to 20,000 homes over thirty years
- A more conservative stock reduction programme, to 30,000 homes
- A substantial investment programme to maintain existing homes and build 5,000 new council properties.
The report notes the commission ‘is not in a position to tell the council which option to choose’.
It says the challenges Southwark faces are ‘a legacy of past [top-down] decisions’ including poor-quality estates built ‘on the cheap’.
Southwark Council set up the independent housing commission to look at the future of housing in its borough in the light of self-financing through changes to the housing revenue account.
The year-long study is expected to be examined by other local authorities considering the future of their own housing stock.
It also identifies the right to buy as an issue. ‘A large and sustained increase in right to buy purchases could have a significant impact on council house financing and levels of stock to rent,’ the report states. Although, it adds that the impact is unlikely to be anything like it was in the 1980s.
It suggests: ‘The council has a chance to break from the past and under the new HRA system can do things differently. It has the opportunity to become a beacon of excellence.’
The study was headed-up by well-known housing lawyer Jan Luba QC and will be presented to the cabinet at its meeting on 23 October. It will then be opened up for public debate.
Peter John, leader of Southwark Council, said: ‘We wanted to see hard facts and the commission has given us this. We acknowledge the importance of continuing to improve and we understand the legacy of past decisions, but our priority is the future.’
The council has made the report available for public debate and discussion.
Mr Luba said: ‘Any reader of our report will immediately see the scale of the issues that need to be addressed. I hope they will also find much of help in formulating a detailed strategy - and a long term plan - for council housing in this vibrant part of inner London.’
London-based think tank The Smith Institute supported the commission.