2nd opinion: It's a fair cop

Housing has become political again. No sooner did the deputy prime minister call for a new consensus between the parties than war broke out between Labour and the Tories. The source of the flak? Three little words – right to buy. John Prescott says he's looking at reforms in "designated housing crisis areas". In contrast, David Davis has said the Tories would extend the scheme to housing association tenants.

Let's get one thing clear. Shelter is not saying that restricting the right to buy will solve the housing crisis. It will not mean that permanent homes will be found for the 80,000 homeless households living in temporary accommodation. That is why Shelter has campaigned, and will continue to campaign, for significant and sustained investment in new affordable housing.

The comprehensive spending review did bring welcome new resources for housing, but the truth is they won't be nearly enough to provide the 90,000 new affordable homes that we estimate are needed every year. As Steve Wilcox argued recently (HT 10 October, page 16), restricting the right to buy is not a substitute for the further investment needed. However, given the scale of the crisis we face, we must look at other ways to maximise the supply of affordable housing. It is in this context that Shelter believes the right to buy should be restricted.

The argument about the impact of the right-to-buy scheme on the supply of affordable lettings has raged across the pages of Housing Today for some weeks now. Some say the policy has only a marginal effect and that those who buy their homes would have continued to live in them anyway. True. But tenants do move on – at a rate of around 5% every year. This frees up lettings. In contrast, once a home has been sold, it will never again become available for re-letting.

Twenty years ago, a parliamentary select committee concluded that the effect of the right to buy on the supply of lettings would be substantial. It was right. It doesn't take a committee of MPs to work out that haemorrhaging 1.5 million homes over two decades has had a significant impact on the availability of new lettings. Of course it would be different had all these homes been replaced. But the fact is they were not.

By 2006, Shelter estimates that about 13,000 lettings will have been lost in London and the South-east alone as a result of the right to buy. The cost of building affordable homes to compensate for the loss of those lettings would be more than £1bn – this would swallow up a significant proportion of the new resources announced in the spending review.

These extra homes are sorely needed – there are currently 12,000 homeless households, many of them families with children, living in temporary bed-and-breakfast accommodation.

This is why Shelter believes restricting the scheme in areas of shortage must be part of the equation for delivering John Prescott's "step change" in housing policy. Of course, this would not be popular. As Housing Today's MORI poll showed (17 October, page 7), the majority of people continue to support the scheme and even back the Tories' idea of extending it. This is not altogether surprising but it would have been interesting to see the results if there had been a credible alternative on the table.

The "equity stakes" idea, put forward in July by the Chartered Institute for Housing and social policy think tank the Institute for Public Policy Research, could provide just such an alternative by allowing tenants to build up material assets, without selling off valuable housing stock.