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It is not sustainable or morally right to continue with the Right to Buy
The basis for Right To Buy sales is encouraging fraud and making one-for-one replacement impossible, argues Nick Atkin
Like many people I’m useless at keeping to my New Year’s resolutions.
But this year is different.
At the start of 2018 I made a resolution to focus on the things that matter, regardless of what the naysayers may say.
I started with the usual vigour that we all have at the start of a New Year by writing an article setting out the harsh realities of why the Right to Buy spectacularly fails to achieve value for money and is contributing to the housing crisis.
Five months on, I’m pleased to say I’ve stuck to my resolution. I’m continuing to make the case for why Right to Buy should be assigned to history.
This is not a new argument. There has been a steady increase in the number of people, myself included (see video clip below), who over the past few years have been making the case for why Right to Buy is now #wrongtobuy.
Nick Atkin makes the case against the Right to Buy on the BBC:
The Right to Buy has led to almost two million homes being sold-off since 1980, with discounts recently increasing to over £100,000 per property.
Despite assurances that these homes would be replaced on a ‘one-for-one’ basis, this hasn’t happened.
Only one new home is built for every five sold.
It is widely accepted that we are in a housing crisis. So how then can it be sustainable or morally right to maintain this continued level of loss to the supply of affordable homes?
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What is wrong with Right to Buy? Why am I trying to scupper the aspirations of those who want to own their own home? There are three key fundamental flaws with the scheme.
The first is that homes are sold far too cheaply. This then means an equivalent number of new homes can’t be replaced from the proceeds. Martin Hilditch’s article helpfully explains why successive governments should take the lion’s share of the blame for the pace of progress so far.
“The Right to Buy spectacularly fails to achieve value for money and is contributing to the housing crisis.”
This is underpinned by a recent analysis by Pete Apps, which makes for difficult reading when you consider the actual numbers involved.
The second is that successive governments have remained wedded to a policy, which is nearly 40 years old, but haven’t taken an objective view of whether it remains the right solution for housing in 2018.
There are a multitude of other home ownership products, which have been introduced by successive governments that are more effective at targeting support to get people onto the home ownership ladder. Right to Buy used to be the only show in town, it isn’t any more.
“Successive governments have remained wedded to a policy, which is nearly 40 years old, but haven’t taken an objective view of whether it remains the right solution for housing in 2018.”
This has led to a perverse position where homes that were previously sold at an eye watering discount are now being rented back by councils who are being forced to spend millions using Right to Buy flats as temporary accommodation.
The third and fatal flaw is that the beneficiaries of the discounts are not for those people who were the original intended beneficiary.
Of the 47 Right to Buy sales at Halton Housing in the past financial year, 14 of these were in receipt of housing benefit at the time of the sale.
In other words, the tenant is not actually the person purchasing the property. This injustice is further compounded when considering around 40% of Right to Buy properties are now privately rented. Where are the former occupants living now?
Then there is the discount. Our Right to Buy sales last year each averaged a discount of £47,627. When considering the average sale price was £88,571, this represents an average discount of 54%!
Even some of the most hardened advocates of the policy on both sides of the political spectrum have admitted it is failing and change is needed.
The recent TV documentary Our Housing Crisis – Who’s to Blame? highlighted how for a few people Right to Buy has been a bonanza.
“Even some of the most hardened advocates of the policy on both sides of the political spectrum have admitted it is failing.”
This highlighted how those residents living in the first ever council estate in the UK – the Boundary estate in Shoreditch – who bought their property under Right to Buy for £17,500, now find these same flats sell for over £1m.
So what is wrong with Right to Buy? Simple. Affordable rented homes are being sold with levels of discount that encourage fraud and make replacement on a one-for-one basis impossible.
Want to know more? This in depth Radio 4 review contains some startling facts. More recently, this Inside Housing podcast puts some more meat on the bones of the argument.
At least this is one New Year’s Resolution I have been able to keep, it’s a shame I didn’t have the same resolve for the others!
Nick Atkin, chief executive, Halton Housing Group
