Boris Johnson wants to extend right to buy to housing associations. But he ignored the serious costs of the policy.
In tough electoral times, politicians seek policies that inspire the hearts and minds of frustrated voters.Boris Johnson proved last month he is no different Announce He intends to extend Thatcher’s key purchase rights to housing association tenants.
The right to buy embeds a concept ‘Property Ownership Democracy entered the British political psyche and brought Thatcher to power in 1979 through massive working-class votes. Currently, it allows council tenants to buy houses on a large scale Discount: £116,200 cheaper in London and £87,200 cheaper elsewhere. Much of the money for this purchase was sent to the Treasury, and the city council was allowed to keep a portion as long as they used it for additional affordable housing in a manner approved by the central government. Johnson wants to extend the policy to housing associations, which now hold most of the affordable housing stock.Since its inception, approximately 2 million sales The right to buy social housing has taken place. For Johnson, it’s a victory for more housing, but it ignores the serious costs of the policy.
First, the sale of council homes has not been accompanied by investment to replace social housing that has lost its right to purchase.Instead, investment in new social housing has been curtailed since the 1980s, with the government invest Instead, pay the housing benefit bill.In addition, the actual purchase right inhibition Building new social homes. Why would a council spend money to build a house, only to sell it at a discount, lose income from future rentals and not receive a full sales receipt?
“Why would a council spend money to build a house, only to sell it at a discount, forfeit future rental income, and not receive a full sales receipt? “
When homes sell at discounts under right-to-buy, it means loss to public finances – estimate £75 billion The entire life cycle of policy since 1980. Extending the policy to housing associations will only extend this disincentive to more social housing providers, slowing social housing construction when it needs to be accelerated.It is estimated that the government may have to compensate housing associations by £14.6 billion If the policy is extended for ten years.
As the purchase rights far outweigh the supply, the average annual net loss is 24,000 Since 1991, the government has sought to implement a one-to-one replacement policy. However, how can one-to-one policy be effectively implemented when purchasing discount rights results in economic losses? Replacing the policy has had little effect. Furthermore, the government says there is no need to replace lost social housing with new social housing – any housing will do. Truly affordable social housing may be replaced by unaffordable shared-ownership properties that are more likely to become viable in development plans.
Second, the policy did not directly lead to higher levels of homeownership or owner occupancy in former social housing.Research from interior housing shows more than 40% The right to buy a house is now a private rental. Affordable social housing has shifted to unaffordable private rental housing.It is no wonder that during the existence of the right to purchase we see ‘“Renting on behalf of others” emerged in 2011/12, when the proportion of households in the private rental sector exceeded that in the social sector. While some social housing is allowed to fall into disrepair, the lack of even social housing regulation in private rental properties means residents live in lower-quality housing with insecure leases, while paying higher rents.
To make matters worse, many tenants of these apartments ‘“Right to Buy” properties rely on housing benefits. 25% of private renters received housing benefits in 2020/21. The right to buy reduces the supply of social housing, which means more people rely on housing benefits because they cannot live in town halls. That means the larger housing benefit bill ends up in the bank accounts of private landlords, rather than councils and housing associations, which recycle it into public investment.
“It’s no wonder that during the existence of the right to purchase, we have seen the emergence of “rental””
Third, the right to buy exacerbates the decline in the perception of social housing, further increasing stigma. The underlying philosophy of the policy is that home ownership is a superior tenure and social housing should serve as a stepping stone to achieving the ideal home ownership. With social housing so scarce, it has become a tenure for the poorest, as only the wealthiest social tenants have access to the right of purchase. As home ownership is promoted, governments have a vested interest in ensuring house prices rise to support their voting base, at the expense of housing the needy. All of this contributes to prejudice against social housing and makes it difficult to gain political support for social housing.
To be sure, the government has tried to use the extension option as a ‘Voting winner before but not following: David Cameron in 2018Nonetheless, Johnson’s statement shows the current government’s dangerous attitude towards social housing at a time when social housing demand is greatest. The focus remains on winning elections, not building a housing system that ensures we can all live in quality, affordable homes.
Without pressure, general attitudes towards affordable housing will not change.At NEF, we are launching our home, a movement to create affordable and desirable social housing for the 21st century.You can use our Social Housing Listening Campaignwhich is gathering views and perspectives on social housing.
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