Right to Buy – 1 step forward, 10 steps back

The Right to Buy is definitely a policy that causes mixed feelings. What its supporters like about RTB is that it helps people who are socially renting into home ownership by providing them with a substantial discount to purchase the property – thus meeting the social aspiration of tenants to own their own home, and providing them with an asset to help secure their future.

But unfortunately it has other negative impacts. A consequence of RTB is that when a home is sold, it’s no longer part of the social housing stock, and is privately owned. If this home isn’t replaced with a new one, then the total stock of social housing shrinks.

The social housing sector is vital role to play in the English housing market. The private market on its own isn’t providing anywhere near enough homes, particularly affordable ones. This has resulted in astronomical house prices and expensive rents that many simply can’t afford. Unaffordable house prices coupled with the undersupply of social housing has forced more and more households into the private rented sector, which is more insecure, more expensive and more likely to inflict poor living conditions on tenants. Many ex-RTB homes appear to now be privately rented – often to people who need housing benefit to pay the rent. More people renting privately costs government and the taxpayer more, as the housing benefit bill has to rise to pay higher, private rents.

For all these reasons, shrinking the social stock is a really bad idea. So it was some relief when the government announced that it would replace all social housing lost through RTB on a ‘one for one’ basis.

So have the proceeds from RTB been used to replace the housing being sold? The short answer – no. Last week we thought only one new home was being built for every five sold under RTB. But it turns out that the truth is worse than this – in fact, it’s twice as bad.

On Tuesday the Department of Communities and Local Government released the latest stats on RTB. This cut the official number of new homes being funded from RTB proceeds by half.  Previously published DCLG figures said that there were 4,795 homes being built from RTB proceeds between April 2012 and September 2014. Yesterday they ‘downwardly revised’ that number to 2,298. Over the same period of time, 22,899 homes were sold.

So now, rather than replacing every social rented home lost, or even one in every five, we’re actually only replacing one in ten. This figure may get even worse if we don’t start building more social housing, because RTB sales are on the up – 3,285 homes were sold under RTB in the December quarter last year, the second highest amount since the September quarter 2007.

Consider all of this alongside the fact that construction of affordable housing is at only one-fifth of the amount that we need, and it’s plain to see we have a big problem. But it’s a problem that is not impossible to fix. The politics of social housing and RTB has changed and is no longer a political barrier to reform like it once was. The next government has a huge opportunity to once again grow the social housing sector, rather than continuing to shrink it. Ironically, growing the social housing stock would mean more homes are subject to the Right to Buy, and give future generations greater opportunity to access homeownership through the scheme.

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2 Comments
  1. ” RTB is that it helps people who are socially renting into home ownership by providing them with a substantial discount to purchase the property – thus meeting the social aspiration of tenants to own their own home, and providing them with an asset to help secure their future.
    :

    But unfortunately it has other negative impacts. A consequence of RTB is that when a home is sold, it’s no longer part of the social housing stock, and is privately owned. If this home isn’t replaced with a new one, then the total stock of social housing shrinks.”

    The state is selling off homes under RTB for £60k and then Shelter is saying the state should build new replacements which cost £200k.

    Then when these ex-council tenants, go on to sell their ex-council homes to cash in and buy a home elsewhere. These ex-council homes are no one really wants to buy.

    Why not just hand £40,000 to every council tenant who want to buy a home. It is a lot cheaper, then replacing social housing.

    Council housing is perverse, you have families on £100,000 paying cheap rents, whilst young working tenants families on £30,000 paying marking rents.

    Society needs to stop demonising tenants and as it has caused a housing bubble. People find it hard to wrap their minds around an economic model which generates silly house prices by stigmatising rent-paying non-homeowners (for being in thrall to landlords) while celebrating pretend homeowners (who are even more deeply indebted to bankers).

    On my street, there is a working couple with two young children. They choose to live in a ONE bedroom flat, to save on rent and their aspiration was to save up for a home of their own.

    Whilst you see a young mother with her two year living in comfort and luxury in a TWO bedroom flat all paid for by the state. Her partner is aggressive and not of good character. She is the council housing list.

    The state is helping the wrong people.

    1. I’m not sure I understand what you interpret to be an ‘aggressive type’ but there are circumstances that neither of us can be aware of without communications with this family. I can assure you that if this is a Council property the maximum the let can be is £500pcm (per calendar month). The interior is most likely not a high standard, because the Council cuts via Austerity does not permit housing to be as nice as your housing, even if the property appears to be larger from the outside.

      You also are not aware of their circumstances, as you are making assumptions based upon your visual judgement and not communicating with your new neighbours. The first year of tenancy in a Council Housing Association property is probationary, so if they break any Laws or Regulations set by the Council they will be relocated.

      So please be aware of this, but do not contact your Council Housing Association unless they are violating the rules set out by the Council. You can obtain this information by request to the Council, or go online and look at the rules on their website.

      This family might have given you the wrong first impression, so perhaps a polite introduction could ease your concerns. Moving into a new home is a stressful event, and a friendly greeting can ease the concerns that you have now. These are very difficult times for many people. I hope that your initial impressions are not true.

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