Right to Buy relies on several mistaken assumptions

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.

Emma Burnell is a Labour activist and political blogger.

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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6 Responses to “Right to Buy relies on several mistaken assumptions”

  1. Commonwealth Party

    There is little point in a right to buy unless it is a right that all tenants have, regardless of the status of their landlord! Otherwise it is just a gift to those who have friends in the local authority housing department, and so creates inequality and division. See our website commonwealthparty.info

  2. Jack Johnson

    Excellent grasp of the issuses.New Labour also called it ‘affordable housing’ which could mean
    shared ownership with tenants paying both rent and a mortgage. Even when I was a Chair of
    Housing under the Tories and New Labour I never stopped calling for social housing with
    affordable rents(same rents as council housing).Right to buy must end to preserves housing
    stocks for those who cannot afford to buy or rent privately.

  3. Ady

    Right to buy – creating mortgage slaves and faclilitating a low waged economy whilst doing nothing to house the disadvantaged.

  4. Matthew Malthouse

    If Parliament were to legislate such that I could require my private landlord to sell to me at a significant discount it would be condemned as legalised theft by those very people advocating right to buy.

    The only difference is that in this case the losses are suffered by a publi body ultimately funded by us as tax payers.

  5. blarg1987

    I think it was just used as an election bribe to turn people from working class to middle class by pointing out they are home owner etc.
    I agree with the concept of council housing which should be re introduced and potentially selling the houses off at a later date on the condition that the sale covered the value of the house, maintenance etc and went to build new housing. That way it allows people to have a place to live that is affordable and costs tax payers nothing.

  6. Newsbot9

    The sillyness of having “affordable” (I refuse to call it social, it’s not) housing with rent above housing benefit is extreme.

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