PAY TO STAY proposals got me thinking about the RTB as higher earners expected to pay more would surely consider they'd be better off cashing in the discount - but looking at the other offering of financial assistance to aspiring home owners I see great gaping inequities that needs thought and attention - ALL Homebuy applicants are required to take the maximum mortgage that their income determines to prevent the exercise of a 'lifestyle choice' to buy lesser % and have more disposable income for other things - existing RP/LA tenants included, ex service personnel and all other qualifying FTBs. At this level buyers will generally be spending around 45% of their net disposable income to fund their basic housing costs.
At this 'affordability threshold' (any) home buyer will not have a lot of surplus net income to fund many 'non-essential' outgoings but are deemed to be able (and prepared) to make these 'sacrifices' to reflect the potential investment they are making in buying their own home and offset against the aspiration of growth in equity value over time and expectation that outgoings will decrease relative to (hopefully) future increase in income. Home owners do 'traditionally' balance their priorities;
With HomeBuy schemes the purchase of further equity shares is dependent on this happening; there is no obligation to buy more and households who could afford to, have often 'grown into' any income increase, so increasing housing outgoings requires further sacrifices. At that point it is a lifestyle choice - some do and some don't. The benefit of the 'subsidy' which provided the tenure choice remains with them until they sell or buy to 100%.
ALL These schemes are also income capped at £60k because that is the level that has been assessed above which households are deemed to be able to afford to access the market - to rent or to buy without state assistance
So here is the conundrum – Right to Buy purchasers are not income capped at all – whatever they earn. providing it is sufficient to afford the (heavily) discounted purchase price (ok DCLG spokesperson – take your point - the discount is rightfully theirs because they have been paying a low rent relative to everyone else for lot of years, oh and may well now occupy a dwelling with rooms excess to their households needs) is just fine – no matter what their mortgage potential – no matter what the % of disposable income, no matter how much surplus they have over that to fund lifestyle choices – non essentials that HomeBuy applicants are not permitted to afford – come to that irrespective of what any other homebuyer is prepared to sacrifice in order to afford to achieve their ‘aspiration’ to become a homeowner…. Yes that is all fair depending on who you are and the sacrifices you made along the way – your journey like lots and lots of other quite ordinary people – not silver spooners – just ordinary.
I can go on – but I won’t. I care allot about people who have housing needs and help them to access housing options – tell them about options that they didn’t even know existed even – but this anomaly sticks in my throat to be honest. Quite apart from the question as to wher=ther or not we shol=uld be seeling this stock when we really can’t afford to replace the stuff one for one or like for like or whatever we are supposed in theory to be able to deliver – why should the masses who are able to access HomeBuy be treated one way when RTB tenants who can afford all the other options that anyone else earning £60k as able or supposed to be able to afford and who are forced to max out their mortgage potential like it or not if they want any help from these products – be able to exercise the right to buy and not have to take a maximum mortgage potential thanks to the whoppingly huge discounts they’ve cranked up???
Think about it carefully before you respond – understand the exact point I am making before you rage on me – it is the blatant disparity and inequitable treatment I am concerned about. I think its implications have been overlooked by Ministers rather than deliberately constructed this way – after all in Maggie’s day tenants were ‘poor’ and could not afford to access the market (well so we understood) so the big British giveaway was great for thousands who would not otherwise have saddled themselves with mortgages nor sacrificed their lifelong security of tenure to run the gauntlet of owner occupation as anyone in negative equity will tell you is not a good place to be, nor locked themselves out from the security of affordable secure sheltered accommodation in their old age –ask many oldies who succumbed to the ‘pressures ‘ to share their RTB with grandchildren then found themselves evicted because they couldn’t get along when the balance of power in the house changed (this was not an isolated situation in the mid 80’s when I was a housing advisor in west London)…..
There absolutely should be an income cap on the RTB incomes – argue the toss elsewhere about ‘pay to stay’ because although related it is NOT the same issue. Forget the clap trap about mixed economic and balanced communities too – RTB purchaser are as disparaging about their tenant neighbours as outright owners buying on newbuild estates who demand to know where the s106 units are so they can avoid moving in next door – there are troublesome tenants but again that is a separate discussion and not one the RTB can influence. Concentrate on the specific point of this question…disparity between assistance schemes is totally unfair … totally.