Selling off council homes
It is not just the dozens of council estates being demolished that is fuelling Southwark’s housing crisis. Since 2011, Southwark has a ‘void disposal policy’ which means it automatically sells of any council homes that become vacant if they are valued at more than £300,000. In 2014, This threshold was increased to £500,000 to acknowledge the rapidly rising house prices as the borough is becoming gentrified (partly as a result of the council’s own policies and stated intentions). Despite this, house prices continue to outstrip the threshold - the average price of a home in Southwark is currently £650k.
The Council argues that the capital receipts from the sale of these council homes are being used to build new council homes. However, spiralling build costs have seen these now costing in the region of £400k per dwelling to build, but more importantly there is a shortage of council-owned land to build them on. The result is that the council is having to build on parks and green spaces on existing estates, which is causing increasing debate and protest.
This compilation taken from auction websites shows a sample of council homes sold through its void disposals policy.
There are no figures publicly available showing exactly how many council homes have been sold under this policy, but general figures for overall stock show that Southwark Council has lost 1,662 council homes in the past ten years.
In the same vein, Southwark has been selling off council-owned land and buildings, the capital receipts from which it says are being used to build new council homes.
The logic fails not just on the same point that there is a chronic shortage of land in the borough, but also that by selling existing land and buildings off to developers for private development, it is further increasing land and property prices - thereby exacerbating the problem.