Assured tenants of housing associations will have the Right to Buy (RTB) their homes at a discount on the same terms as council tenants when the Government rolls it out nationwide. Before announcing a date for implementation, they launched a £200million pilot scheme in August 2018 across 70 local authorities in the Midlands. The pilot is due to run until spring 2020 and Westminster wants to assess the scheme before deciding how to proceed with the policy.
The Conservative Party’s 2015 Manifesto contained a commitment to “extend the Right to Buy to tenants in housing associations to enable more people to buy a home of their own.” They’ve pledged to replace each property sold with a new affordable home. While this plan to put home ownership within the reach of 1.3million more families was welcomed by housing association tenants seeking the RTB, the measure is controversial among others like social landlords.
It will enable tenants to get on the property ladder who otherwise couldn’t own their home in their current situation. However, there is a fear among industry figures that the housing stock won’t be replaced and the market could become overinflated. Is Right to Buy a solution to ease the housing crisis or will it exacerbate existing problems with some areas having a shortage of social homes?
Empowering Tenants and Meeting Ambitions to Deliver Homes
The National Housing Federation have worked with the Government on extending the RTB and designing the scheme for three years. Chief Executive, David Orr, said, “It will be a success for everyone involved only if every home that is sold is replaced with a new affordable home, and if the application process is as smooth as possible for tenants.”
He reiterated the pilot scheme is not the finished product. The Ministry of Housing, Communities and Local Government said a ballot would be the fairest way of dealing with high demand rather than a first come, first served system that wouldn’t serve all residents equally. Landlords need to review applications and carry out eligibility checks for tenants who are successful in the ballot.
Housing associations will be given discretion over which properties they sell as well as dealing with any tenants wanting to buy an exempt property. The organisations will be able to offer them an alternative dwelling to purchase. This process will be watched closely to see how feasible it is.
Replacing Properties: Enough to be Worth Losing Social Housing?
Replacing the sold properties from the Right to Buy scheme has raised a series of questions including how the Government will fund the new homes.
David Pipe is a policy and practice officer at the Chartered Institute of Housing. He’s questioning where the money will be sourced from and if it’s being spent viably. He says, “At a time when we desperately need more affordable housing, this money would be better spent on building new homes for rent and for shared ownership.”
London presents a greater challenge where there will be a requirement to secure development of two new affordable homes for each property sold. Besides the location for new construction work, there’s also the issue of time-lags with replacing a home.
John Healey, the Shadow Housing Secretary, says the policy will make the housing crisis worse. He added, “Right to Buy has decimated our council housing stock. Public money will be spent selling off affordable homes at a discount when it should be used to build them instead.”
Local authorities are concerned that the sale of their most valuable and vacant housing stock will help to pay for the scheme. It remains to be seen whether sales of vacant council stock will generate sufficient funding to pay for an extended RTB. The legality of forcing the sale of assets owned by a non-profit organisation is also being questioned.
Expanding Right to Buy is Part of a Broader Agenda
The Conservatives have publicly acknowledged that housing is a key issue across the country and if their policies can help ease the crisis then it could gain more support. They see this pilot scheme as the first step in helping housing association tenants become homeowners. Scotland has abolished RTB and Wales will too by 26th January 2019 to safeguard its social housing, which highlights the divergence between England and those devolved administrations. Around 94,000 council housing tenants have exercised their right to buy in England since 2010 and it seems the Government’s agenda is to still focus housing initiatives on private home ownership. Affordable housing is in high demand, but it remains to be seen if the market will improve by increasing the number of homeowners in this way.