Reforming the right to buy could help “lay the foundations” of a better future for social housing in the capital, according to local government collective London Councils.

In response to a government consultation, London Councils says the right to buy in its current form is contributing to the capital’s worsening housing crisis and unsustainable pressures on boroughs’ homelessness services.

The cross-party group wants right to buy policy to be devolved to a local level – with local authorities rather than central government making decisions over issues such as the scheme’s eligibility, exemptions and discount rates, London Councils argues that right to buy will better suit a community’s housing needs.

Over 316,000 council homes have been sold in London since the right to buy was introduced in 1980. Based on figures for the past five years, on average 1,500 right to buy sales are made in London annually.

Boroughs say they want to build new affordable homes to replace these properties, but strict government rules on the use of right to buy sales receipts were in place for many years. These restrictions and other challenges facing social housing finances meant one-for-one replacement has generally not been feasible. 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 let local authorities retain 100% of right to buy sales receipts, as this bolsters boroughs’ resources for investing in replacement homes.

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 and 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 to right to buy so we can achieve our shared goals of delivering more affordable housing and reducing homelessness.”