Report recommends sale of expensive social housing to fund less expensive properties

Housing Minister Grant Schapps said in response to the proposal that "it is common sense to use social housing stock as efficiently as possible".

The report, published by think tank Policy Exchange, argues that when an expensive social property becomes vacant, rather than housing one family, there is more benefit to selling that property and using the proceeds on funding the building on multiple, less expensive social housing. 

The Report states that selling expensive social housing when it becomes vacant has the potential to raise revenue of £4.5 billion annually, money which could be used to build 80,000-170,000 new social homes a year.

The result would be to reduce the housing waiting list by between 250,000 to 600,000 households in five years, it said. The Report predicts that the move to end expensive social housing could generate growth of jobs in the construction industry; would be popular with the majority of society; would not affect employment; would raise the standard of living for tenants, and would reduce the housing waiting list.

Shapps appeared to welcome the plans in his response to the report.

"Where social landlords have houses which are worth millions, they are able to sell them and build more affordable homes to help more vulnerable people come off the waiting list. Many independent housing associations have already done this, but councils have been slower to seize the opportunity," he said.

"This Government is investing £19.5billion of public and private funding into an affordable housing programme to deliver 170,000 homes, and has given councils the flexibility to offer fixed term tenancies to new tenants to ensure social housing goes to those in greatest need," said Shapps. "Councils looking to sell vacant social housing can now keep the receipts to invest in affordable housing, regeneration or paying down housing debt in their area."

Others have been critical of the proposal. The National Housing Federation (NHF) acknowledged that allowing housing associations to take advantage of the value of their properties in different ways may assist with the housing shortage, but has said that the findings of the report are "fundamentally flawed" and that the proposal will "effectively cleanse many towns of hard working people who simply can't afford the high prices of buying or renting privately". 

The Chartered Institute of Housing (CIH) said that the report's solution "oversimplifies the problem" adding that "a mandatory system of property disposals does not allow space for the flexibility that housing practitioners need if they are to manage their housing stock effectively".