Friday, 27 February 2015

Council tenants struggle to buy their homes, survey reveals

Right to buy falls flat

Only 4 per cent of people who have expressed an interest in buying their home under the government’s revamped right to buy have managed to complete a sale.

Just 233 sales have completed at 25 councils in London, Birmingham, Leeds and Newcastle, compared with 5,697 expressions of interest from tenants, a survey by Inside Housing has found. This equates to a conversion rate of 4 per cent.

Prime minister David Cameron launched the ‘revitalised’ policy six months ago, trebling the discounts in some parts of the country, with the aim of achieving 100,000 sales.

Hammersmith & Fulham Council has recorded 268 expressions of interest since April, when the higher discounts came into effect.

Andrew Johnson, cabinet member for housing at the Conservative-led west London authority, said delays were caused by people waiting to get mortgages: ‘Property prices in Hammersmith & Fulham remain a stumbling block for many applicants.’

‘I’d like the government to go further and introduce a right to part buy, giving tenants the ability to part buy their council home,’ Mr Johnson added.

Birmingham Council received the greatest number of expressions of interest, at 696, but has sold just 65 properties since April. In the same period last year it sold 71 homes.

Croydon Council recorded 119 expressions of interest since April, versus just two sales. ‘As far as I’m concerned the mortgage market is dead in the water and that’s delaying the process,’ said Dudley Mead, cabinet member for housing at Croydon Council. He added that lower discounts in Croydon, because of the lower value of homes, made the deals unattractive to banks.

A spokesperson for the Local Government Association blamed the mortgage market for the disparity. ‘The LGA will continue to press the government for a review of the right to buy policy after one year,’ he said.

A spokesperson for the Communities and Local Government department said: ‘We would expect anyone thinking of buying their home under the scheme to have waited until the new discounts came into force in April and it takes a number of months for a sale to go through.’

Survey results

Figures are for the period from 1 April. The sales figures for Leeds are until the end of August, and the 2011 figures for Hounslow and Hammersmith are for the full year.

Readers' comments (20)

  • I'm a council tenant who could afford to go through the right to buy process but don't as I live in a high rise block so would never buy it due to possible future charges for major works which you read about that can be in 5 figures. I've noticed from the literature on the RTB website it doesn't give potential buyers this information either which I think is totally wrong.

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  • How about the "wheels have come off..."

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  • The raising of the discount cap to £70k has led to a significant increase in the number of applications and subsequent completions in the local authority area where I work. The number of elderly tenants with significant discount buying their homes has almost quadrupled since April. Last year there were less than 5 RtBs altogether, to date there have been over 20 applications with 4 completions with maximum discount just tipping the £70k limit. The sales, with loss of rental income and notional repayment on debt will have a detrimental impact on the authority's revenue resources. This, coupled with the pending Welfare Reform changes will result in an overall reduction in resources for debt repayment, capital works, repairs & maintenance and general management. Deep joy

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  • Too many people walked into a nightmare situation without any comprehension of the problems associated with it, particularly in rural areas where they now can't sell, there should be a government wealth warning on RTB.

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  • Chris

    Could it be because the number prime decent homes that have not already been sold of are too few to generate much, and the massive increase in rents has meant people do not have much left for savings to use as a deposit, and the massive increase in taxation coupled with wage reduction and employment insecurity resulting from government policy is making it impossible for people to realistically afford a purchase, thus lenders are correctly not lending to them. Just a few thoughts about why, or it could just be the Government led demonisation campaign has been so successful that nobody would want to buy a socially rented home on the grounds it must be in such a dangerous rundown crimeridden slum anyone would have to be mad to even want to live there (and if it is not like that yet it is clear that government policy will soon deliver such conditions!)

    Or, just perhaps people have woken up to the con that is Right to Buy and recognised it is simply another means of transferring ownership to private landlords, underwriting the extra costs through taxation.

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  • Richard, I think you'll find that it's not the elderly tenants buying, but their children/grandchildren buying "on behalf of" their aged relatives, thus, when the aged rellies pop off, they've got a house much bigger than they'd otherwise have been able to buy. Property not only taken out of social rent, but lived in by people who should have no eligibility.

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  • Under RTB many council homes in my small rural town have been sold. Most were larger family homes and never replaced. At present i can find at least 12 up for sale, some of them have been for sale for a long time and at least 4 have been empty for sometime and are in poor condition. These houses could of been homes for the many locals stuck on the housing list. I wonder how many new sales have been agreed in my LA.

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  • KB - agree entirely - the number of younger relatives either sharing in or funding the RtB of elderly tenants is noteworthy.
    Lou - the devastation of the country's affordable housing by the RtB is always more noticeable in smaller neighbourhoods and in rural communities. New providers are still struggling to persuade rural commmunities to "allow" affordable accommodation to be built on exception sites where new 4 & 5 bed mock Georgian homes with two garages are being built.
    The RtB has devastated this country's affordable housing stock and successive governments haven't had the guts to say so - or do anything about it.
    Rant over - back to work

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  • Some good points being made. I would also add that in London and the south east, the price of property is so high that even with a 70k discount many people will still not be able to afford to buy, and even more so if they've few savings for a deposit.

    Having said that, I don't agree that our social housing stock should be sold off anyway, so I'm sort of heartened by this story.

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  • Rick Campbell

    Percentages can be misleading but the actual figure can tell a real story about the sales completed so far following the governments £600,000plus expenditure to promote RTB.

    It will be interesting to see the spin Mr O puts on it during his Autumn Statement on December 5th when possibly he will be warm with his lower garments being ablaze?

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