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.