The Conservatives’ pledge could create a legal minefield and distracts from challenge of building more homes
Wow. For the last few months the housing sector has been focused on a campaign to end the housing crisis in a generation. There was real hope that the political parties were listening and that the manifestos would give commitments to numbers and funding.
On Monday, we got 200,000 a year by 2020 from Labour; yesterday we got 400,000 from the Conservatives; and we even had 500,000 from the Greens. Great stuff. Though you have to sift through the detail to work out what is new housing, what is over one year and what is over the term of the next parliament. And whichever party’s figures you take, it’s still not enough.
But the bombshell as far as associations are concerned was the announcement yesterday of the extension of right to buy to their properties, with the eye catching 1.3 million households to be offered the chance to own their own home. Housing associations are not surprisingly up in arms. But is it good news for tenants either?
This is the most significant test of whether an association is state controlled or independent that we have seen in a generation
A number of initial responses suggest it will neither be as popular or as deliverable as hoped; or that it will actually help those that it is aimed at.
A recent Times report suggested that two thirds of the electorate oppose right to buy. That doesn’t feel like a vote winner. The vox pop view is that it’s a policy that is focused on the “haves” – those who already have a home to rent – rather than the “have-nots” – those who are on housing waiting lists or those currently in the private rented sector.
The strong response from the housing association sector so far suggests that should a future government try to implement the policy, it will be fought out in the courts. This is the most significant test of whether an association is state controlled or independent that we have seen in a generation.
Then there is that niggling question of whether a discount of a third, which still leaves a mortgage in London of anything up to £300,000 plus based on average house prices, is actually affordable. If there is a lesson to be learnt from the current right to buy policy, it is making sure that mortgages are affordable and the repayments are sustainable, and it’s understood that the liabilities for repairs and maintenance fall squarely on the homeowner. Mortgages are a debt however you look at it. For some that’s fine, for others it will not be the right option.
All of this leads me back to the conclusion that, although right to buy grabbed all the headlines, the real issue remains that if you are going to make homes genuinely affordable and create a greater home owning democracy, you need to focus on building more homes.
Steve Douglas is a partner at Altair