Could David Cameronâ€™s flagship housing policy to allow 1.3 million tenants in English housing association homes to buy their properties – hit the buffers?
The governmentâ€™s controversial scheme, which will offer tenants significant discounts to buy their homes – up to Â£104,000 in London and more than Â£77,000 in other parts of the country – is attracting growing and widespread criticism.
Ministers say that housing associations will be compensated for this discounting via money raised by forcing local authorities to sell off their more expensive properties. These funds would be used to build replacement affordable housing.
Critics from across the political and economic spectrum, including the Mayor of London Boris Johnson, former top civil servant Lord Kerslake and leading business organisation the CBI, are warning that this re-vamped Right to Buy project is not deliverable.
So why is this plan being condemned when Margaret Thatcherâ€™s original Right to Buy scheme of the 1980s was broadly deemed to be a â€˜good thingâ€™, helping around two million council house tenants to become property owners?
We are living in different times – these are not the â€˜loadsamoneyâ€™ 80s and millions of people are still feeling the fallout of the brutal recession. As we have emphasised before in this Â blog, we are in the midst of a housing crisis with home ownership out of a reach for many young people, tighter rules on mortgage lending and a shortage of rental properties pushing up rents â€“ particularly in London.
Right to Buy
Right to Buy in the 1980s promised one to one replacement of council housing â€“ it didnâ€™t deliver. Statistics from the Department for Communities & Local Government show that only one in 10 properties have been replaced.
Lord Kerslake, the former permanent secretary of that department, is a vocal critic of the new policy â€“ describing it as â€œwrong in practice and in principleâ€.Â He believes there is a real risk that it will not â€œdeliver the governmentâ€™s aimsâ€ of constructing more homes.
Boris Johnson has warned government colleagues that the plans could spell disaster for London unless there are guarantees that funds from the sale of high value properties in the capital wonâ€™t be siphoned off to build new homes in areas where land and construction is cheaper. He is said to be concerned that the policy will damage Londonâ€™s social mix and will preclude key public sector workers such as nurses and teachers from owning a home in the capital.
Most housing associations are independent charities â€“ with some threatening to sue the government if they are forced to sell their properties. They claim that they could run into financial difficulties and be unable to replace properties sold to tenants. Both the National Housing Federation – the overarching body for social housing associations – and several members of the House of Lords say that the plans undermine charity law going back to the reign of Elizabeth I.
The Labour peer Baroness Warwick of Undercliffe, chair of the National Housing Federation, warns that the policy could set an â€œextremely dangerous precedent for government interference in independent businesses. Distinguished journalist Dominic Lawson â€“ son of former Tory minister Nigel Lawson – points out that as the state does not own the social housing it has no right to sell them and the plan will require compulsory purchase.
This re-hashed Right To Buy seems to be a â€˜back of a fag packetâ€™ manifesto promise made during the election campaign as a vote-catcher. Now it has been laid out in the Queenâ€™s Speech as a cornerstone of this governmentâ€™s policy we must hope that ministers have the good sense to pay attention to the detail.
I urge them to consult widely with all relevant interested parties to ensure that the scheme helps â€“ and not hinders â€“ the need to address the shortage of decent housing in the UK.
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