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Will more Right to Buy deliver more cosy, affordable, well maintained homes for all?

Posted by Gabby Mallett on 16 October 2015 at 1:45 pm

Yay! Now I can buy my own home. Well not so fast, wouldn’t you like to know what’s going on?

Right to Buy (RTB) was introduced by Margaret Thatcher in 1980 and is now close to reaching the 2million homes mark. Defenders of the original policy will tell you how it has helped people to get on the property ladder. We have all seen how much house prices have risen over recent years. Some of these council tenants will have received very low rents, a subsidy to buy their home and then a substantial increase in value. Not bad if you are one of those lucky ones.

However the other side of the coin relates to those who are on very low incomes and couldn’t get a mortgage to enable them to buy their properties. They haven’t been able to take advantage of this policy. Or what about those just a little better off who did buy their council properties, but then couldn’t afford to maintain them. These are now some of the worst performing properties for energy in the country.

Of course there is also a long list of those waiting for a council or housing association property. That was around 1.37 million people in 2014 and that’s just in England. Even by the Government’s own estimate we need to be building 200,000 homes a year.

Before May’s election the Conservatives announced a policy to extend the Right to Buy to Housing Association tenants. The policy made it into the manifesto ‘to enable more people to buy a home of their own’ and in the Queen’s speech on 27th May we were told that they would ‘put homeownership within reach of 1.3 million more families’. Housing associations didn’t like the policy when it was first announced. They were concerned about the current lack of affordable housing and the growing waiting lists. They were also worried from a financial perspective.

The policy is not just a Right to Buy, but also a Right to Buy at a subsidised rate. Where were the Housing Associations going to find the money to build all the extra homes needed to replace those being lost to them. In the main they were against the policy. However, with government facing a rebellion and housing associations feeling that they may be pushed into a corner, a compromise agreement was made.

The National Housing Federation put forward the proposal for RTB on a voluntary basis and the caveat that housing associations should have the right to refuse requests for certain properties. This may be relevant for homes in rural areas where they cannot build new, or for properties where they have invested large sums in renovations works, particularly for those with disabilities.

Hackney councillor Philip Glanville took to writing to housing associations to explain ‘we are determined to oppose the Housing Bill, and ... are so disappointed the national trade body for the housing association movement risks undermining our position. By agreeing voluntarily to the right to buy extension, you make it far more likely that the other measures in the Housing Bill will become law. This will fundamentally undermine the aspiration we have all worked towards to provide good quality affordable housing for low paid households and others’.

John Healey, the shadow Housing Minister has called this a ‘backroom deal’ and insisted that it is designed to ‘sidestep legislation and the proper public scrutiny in parliament’. Apparently the voluntary deal means that there is now no requirement for the policy to be debated or passed into law. David Cameron used his speech at the Conservative party conference on 7th October to announce that agreement had been reached with the NHF at that the first housing association tenants would be able to buy their homes in 2016.

Housing Associations will now be compensated by Government for the cost of the discount which will be given to the tenants. This money, along with the proceeds of sale should be used to build new homes, though there won’t be a requirement for them to be built in the same area. They may also build some of a different tenure, eg shared ownership. But, the homes should be replaced on a one for one basis.

Greg Clark , Secretary of State for Communities and Local Government explained that ‘Until now, Right to Buy discounts have only been available to tenants in local authority properties and some former council properties. Extending these discounts to housing association tenants in England will end this unfairness.’

So what’s next? If you are a current tenant in a housing association property and think you may want to buy your home then you should contact your landlord, many are already taking expressions of interest. If you are an aspiring first time buyer looking for affordable housing then sadly this may make it even more difficult for you.

Photo: SuperHomes

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