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Richard Best is an independent “cross-bench” member of the House of Lords and has successfully piloted 5 Private Members Bills through ...more
Government should fund social landlords to buy up private lets
The government should set up a fund that allows social landlords to buy private rented sector homes and turn them into social housing and temporary accommodation, argues Lord Richard Best, chair of the Affordable Housing Commission
Back in the 1970s, many of today’s biggest housing associations were busy buying up and modernising the properties of private landlords. Lives were changed and whole areas were transformed. And the housing associations accumulated assets that fuelled their future growth.
“The PRS is simply not a suitable vehicle for providing secure, decent accommodation for those on lower incomes”
The Affordable Housing Commission’s new report – A National Housing Conversion Fund: Buying Properties to Boost Housing Supply – advocates a return to this approach. Where established social landlords are not interested, others, such as local housing companies and community-led housing organisations, can step in. Our report also proposes funding housing associations to purchase market housing on stalled sites – like the Housing Market Package of the early 1990s.
Why should chancellor Rishi Sunak take this proposal seriously?
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The central message of the commission’s work is that the switch from social housing to a private rented sector (PRS) of more than two million landlords, has gone too far. It’s led to an affordability crisis: the PRS is simply not a suitable vehicle for providing secure, decent accommodation for those on lower incomes. A rebalancing is needed.
The commission is calling for a greater supply of social housing: a £1.3bn Conversion Fund would contribute to that, providing an extra 42,500 social and affordable rented homes. It would also reduce numbers of non-decent homes that undermine health and social care budgets; address fuel poverty and decarbonisation; regenerate high streets, and replace the necessity for councils to pay over the odds for temporary accommodation.
The chancellor will also recognise the broader economic arguments – the fact that a significant acquisition and modernisation programme (and a restart of new developments) creates badly needed jobs and stimulates local economies, contributing to the levelling up of investment and opportunity in our neglected towns and cities.
But why now? Why will developers and landlords want to sell now?
The housing market is currently witnessing the “dead cat bounce” – the impression that house prices are going to keep rising when in reality the dire economic circumstances mean a severe fall is inevitable. Pent-up demand – and stamp duty holidays – will evaporate.
Developers without deep pockets may well need to part with sites where future sale prices are likely to be lower than forecast. With the backing of a Conversion Fund, social landlords can take up the resulting opportunities.
And many private landlords will be exiting the market. Evictions caused by the pandemic reveal the inadequacies and insecurities of the sector, not only for tenants but for small-time landlords. Loss of much of their income – often their pension – and the hazard of future arrears makes this investment less attractive. Tougher regulation on security, energy efficiency, licensing; stronger enforcement of health and safety measures; and tax changes – particularly an end to higher rate mortgage interest tax relief – are all biting.
The housing market is going to change. The chancellor should take the idea of a Conversion Fund seriously and use this moment to rebalance the system in favour of more affordable, secure, decent homes for all those on modest incomes.
Lord Richard Best, chair, Affordable Housing Commission
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