William Eichler 15 May 2025

London boroughs face £264m council housing cuts

London boroughs face £264m council housing cuts  image
High rise council flats in south west London. © William Barton / Shutterstock.com.

London boroughs will need to reduce spending on social housing by £264m over the next three years to avoid the collapse of their council housing finances, cross-party group warns.

London Councils warns the costs of managing council housing has ‘spiralled’ while national policy limiting social rent increases below inflation has meant income has failed to keep up.

Local authorities in the capital own and let around 390,000 social homes – housing more than one in 10 London households.

A new report by the body representing London councils – Crunch point for London council housing finances – warns that boroughs are ‘not in a position to maintain spending in real terms’ on their council housing stock despite the ‘urgent need for investment’.

Cllr Grace Williams, London Councils’ executive member for Housing & Regeneration, said: ‘Boroughs are frustrated that at a time when we want to invest in our council housing and build new social homes, the grim reality is that many will need to make deep cutbacks.

‘We are dealing with fast-rising costs but also the legacy of years of government underinvestment and budget squeezes.’

A Ministry of Housing, Communities and Local Government spokesperson said: 'The Government inherited a serious housing crisis, but we are taking decisive action to turn the tide and deliver the biggest boost in social housing in a generation.

'That’s why we’re exploring a new 5-year social housing rent settlement to provide the sector with the certainty it needs to invest in new social housing.'

Piali Das Gupta, London Councils’ Strategy Director – London’s Future, looks at what Labour should do to solve the capital’s housing shortage.

Black hole spending review image

Black hole spending review

Jonathan Werran, chief executive of Localis, reflects on what the Spending Review means for local government.
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