London Mayor Sadiq Khan has revealed a policy to use housing cash to purchase existing homes from buy to let landlords rather than use those funds to build new social homes.
With some landlords looking to sell, first time buyers hoping to gain a home look like being out competed by taxpayer money.
The move acts as a boost to private landlords, and ensures prices stay up punishing those looking to buy.
GLA Deputy Mayor for Housing and Residential Development Tom Copley tweeted today:
In recent years boroughs have been doing similar including in Greenwich. I’d previously covered council reports which showed that buying existing homes was the worst value option to enable a greater number of social housing.
Greenwich Council have been spending an average of £394,550 per home purchased in recent years, while the average cost to build a new home was £223,000:
Buying existing homes of course also fails to increase overall housing numbers than building new achieves.
In effect it’s a policy that helps landlords, harms first time buyers looking to buy as landlords seek to sell. They often cannot compete with public authorities and the policy results in no overall increase in housing numbers in the capital.
The argument for it is that existing homes can be bought quickly, which may have been given a pass a few years ago when first seen. But then you see the same the next year, then the next year, and then a decade later shouldn’t a pipeline of public housing be ongoing so all funds can go towards new social housing at far better value for money?
Landlords do well though, though the same cannot be said for younger buyers, private renters or council tenants as it’s the worst value option for providing public homes.