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The government should know the numbers on Rent to Buy

Our investigation raises questions about the effectiveness of Rent to Buy and about the government’s scrutiny of its own policies, writes Inside Housing’s Martin Hilditch

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Scientific experiments often start with a hypothesis about how a problem might be tackled. The hypothesis is then tested, evidence produced and conclusions drawn.

Housing policy is big on hypotheses and conclusions, but not always so good on the testing. Recent negative headlines about Universal Credit in effect centre on the apparent lack of connection between evidence on the ground and the ongoing roll-out of the policy.


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This week, Inside Housing’s investigation into Rent to Buy raises serious questions about the effectiveness of the policy to date – but also about the lackadaisical approach to evidence-gathering in this area.

We sent off Freedom of Information Act requests to the Homes and Communities Agency (HCA) seeking information about Rent to Buy homes built under the National Affordable Housing Programme 2008/11. We asked the Greater London Authority (GLA) similar questions.

At the time, the scheme was attracting headlines in the national press, such as “try it, and if you like it, then buy it”.

The hypothesis is certainly an attractive one for individuals currently priced out of homeownership. Rent at below market rates for a period (five years in the original scheme), save a deposit and then buy the home. You can see why it has caught the eye of successive governments.

Both the HCA and GLA are able to confirm the broad outputs. The HCA knows that 5,544 homes were completed by 2012 under the Rent to HomeBuy scheme. The GLA can tell us that there were 3,254 completions under an intermediate rent product, which also assumed tenants would save and buy.

Years on, and with Rent to Buy products continuing to entice government, one would expect that evidence from those earlier schemes could start to influence future product development.

 

Read our full investigation here

That is where you would be wrong. Despite funding the schemes, the HCA doesn’t have a clue about how many tenants have gone on to buy a home as a result (this, remember, is the prime goal of the scheme).

It knows as much about who’s going to win next year’s Grand National as this flagship scheme. The GLA tells a similar story.

To help them out, Inside Housing approached various housing providers for data. Not all of them were able to provide it.

The nine that did had sold 1,594 Rent to Buy homes since 2008. Of these just 180 had been sold to tenants who hoped to buy them, with two providers selling none of the homes at all to tenants.

"The government needs to get a grip on the likely results"

This raises some concerns about whether Rent to Buy is delivering and how to improve performance – never mind the end result for the large numbers of individuals who signed up.

Above all it raises questions about the absence of any sensible scrutiny at the heart of policymaking.

If the government is considering ploughing further resources into Rent to Buy, surely it needs to get a grip on the likely results and gain some understanding about how to maximise the bang it gets for its buck.

At the moment we’re operating on something worse than guesswork.

Martin Hilditch, deputy editor, Inside Housing

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