The Bane of Social Housing

Can we afford to have housing supply in the UK sabotaged by Right To Buy? There's a hole in my bucket, dear Liza, dear Liza...

There’s a hole in my bucket, dear Liza, dear Liza… Can we afford to have UK housing supply sabotaged by Right To Buy?

The Story

The 2015 General Election will be vitally important for the UK Housing sector – it is a chance to push housing to the top of the political agenda where it belongs. The UK is in the midst of a housing crisis, a crisis of both supply and affordability (as I blog about here), and there is a genuine feeling that massive action needs to happen now if we are to have any hope of addressing the problem. To that affect, the Homes For Britain campaign (@HomesForBritain) is calling on all political parties to commit to ending the housing crisis in a generation.

There is no one policy or change that will single-handedly combat our housing crisis, although greatly increased house building is generally considered to form part of any sensible response. How this can be done is still open to debate, and there are wide-ranging ideas – government grant, planning and policy changes, new homes corporations, etc. – on how to ‘top up’ available housing supply to acceptable levels.

But filling Britain with new housing stock is only part of the equation; you see, to reference a classic nursery rhyme – as I am want to do – there’s a hole in my bucket, dear Liza, dear Liza…and that hole is Right-To-Buy.

Right of Passage

“There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered…” – Michael Heseltine

While local authorities have been capable of selling social rented stock to tenants, the practice didn’t take off until the ‘Right-To-Buy’ (RTB) was introduced as legislation in the Housing Act 1980 by Thatcher’s Conservative government. Of the six millions or so people affected, approximately one in three bought their property. By 1987, more than 1,000,000 council houses had been sold to tenants in Britain.

RTB waned under subsequent Labour administrations due to the reduced discounts, but the policy was again revived by the Conservatives in 2012, which set discounts to a maximum of £75,000 or 60% of the house value (70% for a flat) depending on which is lower. In March 2013 the maximum discount in London was increased to £100,000.

Even now, despite the ‘success’ of the policy – 22,500 homes have been sold through RTB since significantly higher discounts were introduced in 2012 – there is a fresh campaign to push RTB, and the promise of home ownership, on social housing tenants.

One of the main reasons for a reinvigorated RTB policy in recent times is that it promoted the traditional Conservative ideology of home ownership, itself regarded by the Tories (at least those at the time of the policy’s introduction) as critical for an individual’s economic self-sufficiency. So it is that Brandon Lewis MP, the recently appointed Minister of State for Planning and Housing, will rush to the policy’s defence should he feel it being threatened:

While my political allegiance is based on policy rather than familial tradition or preference for a certain colour of rosette, Mr Lewis can count me – or should that be spin me – among his supposed ‘enemies of aspiration’. He’s wrong to use the term, of course…and I believe he’s wrong about RTB too.

Wrong-To-Buy

My position on RTB is clear: Right To Buy should be abolished.

My reasoning is similarly clear, and requires little exposition: you don’t solve a supply crisis by reducing supply.

The Coalition has promised that for every property sold under RTB, a replacement property would be found, but this promise has not been fulfilled. Indeed, there is even doubt regarding whether it can be fulfilled at all – Nick Atkin, Chief Executive of Halton Housing Trust, has said that his organisation needs to sell seven homes through RTB before they can afford to build a single replacement. (Nick also believes that RTB schould be scrapped – his opinion piece on the subject is well worth reading.)

Financial logistics aside, authorities simply don’t appear to be eager to pursue RTB replacement: earlier this year the BBC reported that leaked documents from the DCLG stated that while 20 councils each retained £5m+ in receipts from RTB sales, fewer than 30 replacement homes were started. There is no incentive to start work early on replacement properties.

But even if a one-to-one replacement were being achieved, RTB would still be hindering efforts to combat the housing crisis, at least in terms of social housing: the net number of available social rented stock would not increase – receipts would be used simply to maintain current, inadequate stock levels.

RTB – The Bane of Social Rented Stock

In quarter one of the current financial year, i.e. April 2014 – June 2014, the DCLG estimate local authorities sold 2,845 dwellings under the RTB; 31% higher than the 2,171 sold in the same quarter of 2013 to 2014. However, local authorities only recorded 290 housing completions in that same period.

SHOUT (Social Housing Under Threat), the social housing campaign, demands as one of its key aims that all social rented homes lost through RTB should be replaced on a like for like basis. However, when local authorities are only replacing 10% of social housing stock lost to RTB the policy doesn’t just put social housing under threat; it decimates it.

When the manifesto first launched I questioned why SHOUT had not gone further and demanded that RTB be removed, and I do not believe that time has found my instinct to be misplaced. RTB is a ‘hole in the bucket’ of tackling the housing crisis, and the more existing social rented stock is reduced, and inadequately replaced, the less chance there is of social housing securing a foothold in the general conscious as a viable – and, indeed, vital – tenure.

Because the problem with RTB, beyond the physical loss of social rented stock, is that the policy implies that social rented stock is not a viable tenure. RTB is championed as allowing social housing tenants to get on the property ladder, as if to rise up from the apparently undesirable status of social housing tenant. For Brandon Lewis to call opponents of RTB ‘enemies of aspiration’ is for Brandon Lewis to imply that people should not aspire to be social housing tenants, a claim that necessarily harms the campaign for social housing and frankly insults all those who work in the sector and live – happily and willingly and proudly live – in such tenure.

Conclusion

Despite the above, I don’t have a problem with the idea of RTB per se. For social housing tenants who lived in their properties for a sufficient period of time, who have made their houses homes, and who wish to pursue home ownership – which, like every other tenure type, including social housing, is a viable choice – then RTB could be just the policy to facilitate this ambition. But a policy that necessarily removes social housing supply cannot be allowed to continue at a time when available housing stock desperately needs to increase, not diminish. Maybe there will be a time when RTB is an appropriate policy to have in place…but now is not that time.

When our housing crisis has been addressed, when social housing is no longer under threat, and when the policy can genuinely work as intended without negatively impacting existing stock numbers and the aspirations of those who just want a roof over their family’s head, then – and this should be read in the voice of Tom Hardy’s ‘Bane’ from The Dark Knight Returns – then you have my permission to buy.

18 - Bane of Social Housing

References

Affordable, Flourishing, Fair – A Manifesto to Save and Extend Social Rented Housing, SHOUT, June 2014, Available: https://onedrive.live.com/view.aspx?cid=D36D6C8B249EE19C&resid=D36D6C8B249EE19C%21146&app=WordPdf

House building: June Quarter 2014, England, DCLG, August 2014, Available: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345947/House_Building_Release_-_June_Qtr_2014.pdf

80% of councils struggling to replace right to buy homes, Inside Housing, Online: http://www.insidehousing.co.uk/80-of-councils-struggling-to-replace-right-to-buy-homes/7002799.article, Available: September 2014

Government to urge a million social housing tenants to use right to buy, 24Dash, Online: http://www.24dash.com/news/central_government/2014-09-25-Government-to-urge-a-million-social-housing-tenants-to-use-right-to-buy?utm_source=dlvr.it&utm_medium=twitter, Available: September 2014

Homes for Britain needs you!, CIH, Online: http://www.cih.org/news-article/display/vpathDCR/templatedata/cih/news-article/data/Homes_for_Britain_needs_you?utm_medium=email&utm_source=Chartered+Institute+of+Housing&utm_campaign=4734053_Homes+for+Britain&dm_i=YRX,2TGTH,GQVX6A,A8Z5E,1, Available: September 2014

Homes For Britain, Online: http://www.homesforbritain.org.uk/, Available: September 2014

Labour conference 2014: housing roundup, The Guardian, Online: http://www.theguardian.com/housing-network/2014/sep/25/labour-conference-2014-housing-roundup, Available: September 2014

Opinion: Right to buy isn’t right and it needs to be scrapped. 24Dash, Online: http://www.24dash.com/news/housing/2014-05-22-Opinion-Right-to-buy-isn-t-right-and-it-needs-to-be-scrapped, Available: September 2014

Right To Buy, Politics.co.uk, Online: http://www.politics.co.uk/reference/right-to-buy, Available: September 2014

Right To Buy: buying your Council home, Gov.co.uk, Online: https://www.gov.uk/right-to-buy-buying-your-council-home/overview, Available: September 2014

Right to Buy sales in England: April to June 2014, DCLG, Online: https://www.gov.uk/government/statistics/right-to-buy-sales-in-england-april-to-june-2014, Available: September 2014-09-23

Ministers warned of decrease in house building, BBC, Online: http://www.bbc.co.uk/news/uk-politics-28114463, Available: September 2014

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3 comments

  1. I don’t have a philosophical objection to the Right to Buy, some tenants are genuinely attached to their home and not want to move. There are some issues around scarcity and the ability to replace in rural locations. It is the right to a discount that is iniquitous and I would scrap. If landlords got full market value then they could genuinely replace 1:1. In truth this would stop that vast majority of sales so a win-win.

    1. It’s a good point you raise about the discount – one of the main failings of RTB is that one-for-one replacement is not happening, something that might be more likely if greater / full receipts from sale were available. Still, without a real – perhaps, legislative? – incentive to build replacements, landlords may still drag their heels over replacement as they are now.

      Of course, if we are to scrap the ‘right to a discount’ we may as well scrap the right to buy – after all, local authorities have always been allowed to sell their stock to tenants; RTB is only different through the offer of discount, arguably to partly account for rent previously paid, but mostly (in my opinion) to push the Conservative-ideology of home ownership.

      Thanks for taking the time to leave a comment, Bill – more to think about!

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