A recent article on Conservative Home bemoaning the fact that the reinvigorated Right-to-Buy policy has not taken off and suggesting a further raising of the discount deserves challenging by the reality-based policy community.
The reinvigorated Right-to-Buy policy championed by this government has proved something of a damp squib. While sales have doubled, they have done so from such a low base that this is nothing like the second home-buying explosion the policy was sold as.
A recent article on Conservative Home bemoaning this fact, and suggesting a further raising of the discount, made some rather spurious claims about the policy that are accepted as fact on the Tory right but deserve challenging by the reality-based policy community.
The principle claim made in the article is that receipts from Right-to-Buy will be recycled back into “new affordable homes for rent”.
There are a number of problems with this claim.
The first is that the term “affordable” has become highly charged politically. Affordability is – of course – a subjective concept. In this case, it means local authorities and housing associations charging up to 80% of local private sector rents.
In many areas – particularly those with the highest housing needs – these rents are extremely high, and even with a 20% discount, the new “affordable” rent will be significantly higher than traditional “social” rents.
This makes it harder for those with low incomes. Housing thus becomes the preserve of either those who can claim 100% of their rents through housing benefit, or those who can afford the higher rents.
Combined with moves to end lifetime tenure, it makes social housing a significantly less attractive longer-term option than the previous scheme, thus making it harder for families to stay in one area along with their developed support systems.
The second major problem with this scheme is the way it has been sold as replacing housing stock and therefore helping to alleviate the housing crisis.
Again this comes down to some very Orwellian language. The government are selling the scheme as offering one-for-one replacement. They do as little as possible to dispel the general myth that what they mean is like-for-like replacement, but in fact they don’t: not at all.
There is nothing in the regulations or advice to local authorities that says a unit must be replaced with a unit of the same size. So a social housing provider could sell a four bedroom home and use the receipts to build a one bedroom flat.
Also, the scheme is a national scheme. So if a council in a high rent area decided it cannot afford to build based on the proceeds of the sale, the money is returned to a national pot and used to subside “affordable” rent schemes being built elsewhere.
This hits those who live and rent in high rent areas twice.
First councils cannot afford to replace their much needed stock so must fund schemes elsewhere, and secondly it discourages councils in high rent areas from building at all (as they would lose both stock and proceeds if the stock were bought, which could happen after just five years).
Right-to-buy is not a policy that is designed or intended to do anything about housing. That may sound a little odd, but it’s true. It is primarily a policy that allows Tories to tie themselves to one of Margaret Thatcher’s policies.
Once so popular in the county, it’s lacklustre uptake now is not the point for those Tories who push it. For them it is a dog whistle to the Party faithful. That’s why Grant Shapps considered it a great success – it got him where he wanted to be. The rest is mere frippery.
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