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London council sets up £16m RTB fund for associations
Hackney Council will launch a £16m fund made up of Right to Buy receipts for housing associations to bid to build affordable homes.
In an effort to avoid paying the receipts back to government and deliver more affordable homes in the borough, the council has launched its Housing Challenge programme which will issue grants – made up of money from council homes sold under the Right to Buy – to help fund new affordable homes. A council spokesperson said bids for social rented or London Living Rent homes will be prioritised.
The council said it does not consider affordable rents to be “genuinely affordable” because of the high market rents in the borough.
The £16m fund will be split over seven years, with the largest amount (£4.2m) available in the first year.
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The grants are only available to cover up to 30% of the development costs, a rule set by government over the spending of Right to Buy receipts.
Councils struggle to spend Right to Buy receipts because the government stipulates they must be spent within three years and can only pay for 30% of a new development.
Fewer than 300 new homes are expected to be built by housing associations in Hackney in the next two years – a 90% drop since 2011, according to the council.
Bids will be assessed against certain criteria, including housing affordability, quality of housing management, and contribution to the council’s wider regeneration objectives – such as new jobs and training opportunities.
The deadline for housing associations to submit a bid for the first round of funding is 29 September.
Philip Glanville, mayor of Hackney, said: “Housing associations have always played a vital role in keeping our borough a place that people of different backgrounds and incomes can call home.
“That’s why today I’m making this new fund available to help them continue that work long into the future, using money that the government makes it difficult to spend ourselves.”
