Reforming the Right to Buy scheme could be key to securing a better future for social housing in the capital, according to London Councils.

The cross-party group has urged for local control over the policy, arguing that its current form is exacerbating London’s housing crisis and placing unsustainable pressure on borough homelessness services.

In response to a government consultation, London Councils has proposed devolving Right to Buy decision-making to local authorities. This would give councils greater flexibility over eligibility, exemptions, and discount rates, allowing them to tailor the policy to their communities' housing needs.

Since Right to Buy was introduced in 1980, more than 316,000 council homes have been sold in London. Over the past five years, an average of 1,500 homes have been sold annually under the scheme. However, due to government restrictions on the use of sales receipts, replacing these homes has been challenging. As a result, the total number of council homes in London has fallen from 715,000 in 1980 to 390,000 in 2024 – a 45% decrease.

London Councils welcomed the government's decision in October 2024 to allow local authorities to retain 100% of Right to Buy sales receipts, a move that will bolster efforts to invest in replacement homes. The group emphasised that alongside wider policy reforms, this change will better equip boroughs to maintain and expand their social housing stock, ensuring more affordable housing options for Londoners.

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It was recently revealed that over 330,000 households are on waiting lists for social housing in the capital. Homelessness is skyrocketing, with more than 180,000 Londoners – equivalent to at least one in 50 residents of the capital – homeless and living in temporary accommodation arranged by their local authority. London Councils estimates that boroughs collectively spend £4m every day on temporary accommodation, posing a critical risk to their financial stability.

Although London Councils acknowledges Right to Buy has successfully facilitated homeownership and social mobility for many Londoners, it warns that boosting the number of homes for social rent "must now be the priority" in the face of London’s worsening homelessness emergency.

Cllr Grace Williams, London Councils’ Executive Member for Housing & Regeneration, said: "Reforming Right to Buy could help lay the foundations of a better future for social housing in the capital.

"While the scheme has brought benefits to many Londoners, it has also driven a depletion in London’s social housing stock. The figure of 316,000 council homes sold in London is startlingly close to the figure of 330,000 households stuck on social housing waiting lists in the capital. In the context of London’s worsening homelessness emergency and desperate need for affordable housing, boosting the number of homes for social rent must now be the priority.

"Giving councils control over Right to Buy means we can ensure the scheme suits local needs. We’ve already seen positive changes to empower local authorities, with boroughs now able to retain 100% of Right to Buy receipts so that every penny raised from a council house sale can go towards building a replacement home. We look forward to working with the government on further reforms Right to Buy so we can achieve our shared goals of delivering more affordable housing and reducing homelessness."