“The hare-brained idea of extending Right to Buy to housing associations is the opposite of what the country needs. There could not be a worse time to sell off what remains of our last truly affordable social homes” said Polly Neate, chief executive of Shelter.
This is the response to Boris Johnson’s latest vote-winning wheeze who has urged officials to extend the “Right-to-Buy” scheme to England’s two million housing association tenants.
Make no mistake about what is being done here. Unlike Thatcher’s right-to-buy policy of selling off council-owned stock – housing associations are private companies operating as not-for-profit organisations – but nonetheless, private companies they are. They have very gradually replaced councils as the main provider of social housing in the UK.
From this, one could assume that the government could attack any private company owning a property portfolio and force them to sell to tenants at discounted rates. As for housing associations, they were set up to counter the effects of Margeret Thatcher’s sell-off.
From the original RTB scheme only 1 in 20 that were sold were replaced, and of those sold over 50 per cent are let out for higher rents than in the private sector, with thousands of rents being subsidised or paid for by the taxpayer.
Ten years ago – private landlords had already bought up half of the former council homes that sold as right-to-buy across London alone. The campaign to sell these government-owned properties has been highlighted in many reports as providing poor value for money to both taxpayers and local authorities.
Last year, the Local Government Authority appealed to the government as it was predicting the cost-of-living crisis would see waiting lists for council accommodation double within a year. It argues that – “funding to build 100,000 social homes for rent each year, which would not only achieve a third of the Government’s annual housing target but improve the public finances over 30 years by £24.5 billion.” However, Boris Johson has instead decided to do the opposite.
The government commissioned a report entitled – “The Impact of the Existing Right to Buy and the Implications for the Proposed Extension of Right to Buy to Housing Associations.” (LINK) It covered a statistical period between 2005 and 2015 because David Cameron’s government attempted to do the same seven years ago.
It found that the number of dwellings owned by local authorities in England declined from 5.1 million in 1980 to 1.7 million in 2014. The total capital receipts from Right-To-Buy property sales up to 2010/11 amounted to around £45 billion. Part of the result though was that the fall in council-owned property meant that four years ago, there were more than one million families on lists waiting for a council home. Astonishingly, over 100,000 families had been waiting more than ten years and a further 310,000 had been waiting over five years. At the time, another 80,000 families were stuck in temporary accommodation.
The same report also stated that – “The extension of the RTB to the housing association sector will temper the relative decline of owner-occupation in the English housing market that has taken place in recent years. But it will not, on its own, reverse it. Any claims the government might have that this is somehow empowering families is nonsense. What they are after however, is the claim they have increased home-ownership, which has fallen from 73 per cent in 2007 to 63 per cent in 2019 – to 56th in the world.
The report went on to say that – the lack of replacement of the rented stock that has been bought over the years has intensified problems of housing affordability … and that – “the resale of RTB property into private renting results in higher housing benefit expenditure.” It is a fact that around 65 per cent of housing association stock is rented to the unemployed.
The other important point that was made and highlighted to the government was that – the most common household type (for a council house) is a two-parent family with children at school” but that “the pace of growth of private renting in the RTB resale sector may affect the demographics, dynamics and stability of some neighbourhoods.”
The upshot of this campaign by the government to force privately owned arms-length not-for-profits to sell their stock is nothing more than headline-grabbing. Any promises they make that new affordable homes will replace those that are sold will be a lie as the entire RTB scheme from start to finish has seen nothing other than a dramatic fall of council-owned low-cost homes for rent. Indeed, as mentioned, that replacement stock number since 1980 was just one for every in twenty sold.
Housing experts warned the policy amounted to the sell-off of affordable homes during a cost-of-living crisis.
Shelter said that in the last three months of 2021, nearly 12,000 households in England became homeless every month, more than 8,000 of them families with children. “There could not be a worse time to sell off what remains of our last truly affordable social homes. The living cost crisis means more people are on the brink of homelessness than homeownership. These half-baked plans have been tried before and they’ve failed.”