My thoughts on right to buy
Created on Tuesday, April 14th, 2015
by Peter McCormack
The Conservatives today launched their manifesto with one of the central themes being the extension of right to buy to housing associations.
Derwent Living is a private organisation, and the pledge would mean using public money to pay organisations like ourselves to fund the significant discounts planned. There are even questions around the legality of such a move.
Derwent Living’s chief executive Peter McCormack sets out his thoughts on the controversial proposals.
Crisis, what crisis?
The housing crisis in this country is down to lack of new affordable housing being delivered over a number of generations. Right to buy legislation for council housing has only served to exacerbate this shortage.
A right to buy for housing association tenants may damage our ability to build new homes in the future. We borrow against our existing assets to fund new homes; if these assets are lost our ability to build is impaired.
- Around 60% of our properties are houses or bungalows
- …and 40% are flats, bedsits or maisonettes
- If 500 properties were sold, it would require around £15 million in funding to cover discounts
Social housing provision
Social housing assets exist for the common good, not for individual gain and are there to help those who most need them. Housing associations exist to give security of tenure to those who wish to rent and have options available for those who wish to buy too. Derwent Living has been providing affordable accommodation for 50 years, to thousands of households.
Housing associations encourage home ownership through shared ownership schemes. With the public funds that a Conservative Government would use to pay for right to buy discounts, the sector could build over a million new shared ownership properties in the next five years. This would be new housing and made available to people who aren’t adequately housed at the moment.
Indeed commentators have made the point that the RTB will not help any of the nine million people who are housed in private rented accommodation.
On private rental
Long-term we will lose social housing stock, so where are low income families and people whose rent is paid through housing benefit going to live? In the private-rented sector? Private landlords are under no obligation to house those in receipt of housing and other benefits.
Those living in privately-rented properties live in a much more uncertain world, with no security of tenure and the possibility that at any given moment, the landlord could decide to sell.
An estimated £4.5 billion per year unlocked from selling local authority properties may not cover the cost of discounted rates plus the costs of clearing brownfield land. And in the long-term, once councils have sold all of these properties and their own stock is depleted, with no means to replace them, how is the discount to be paid for?
This manifesto pledge is just that – and the democratic process will tell us whether this will be part of the next Governments’ programme or not. I would not normally comment during an election battle but on this occasion I had to because this is a fundamental challenge to the work of housing associations and their very future.