Extending the right to buy policy to housing association tenants is likely to undermine rather than boost investment in new affordable homes
We, along with the whole housing sector, have been calling for all political parties to commit to ending the housing crisis within a generation. The Homes for Britain campaign has, in this respect, been very successful. All major parties now admit that we have a dramatic undersupply of housing and that we must take decisive action to ensure that Britain is well housed.
It is clear the British public is also very concerned, with 86% of people agreeing that we have a crisis and over half now saying that they think the solution is building new homes in their area.
Since 2012 with the government reinvigorated right to buy, and strengthened their commitment to replace homes sold, fewer than half the properties (46%) have actually been replaced
As we have entered the home straight to the general election we are seeing the publication of manifestos: a moment which housing and policy geeks like me have been awaiting with bated breath. Of the many policies on housing (Labour backs their earlier Lyons review, Lib Dems have published the top line of their housing policies ahead of their manifesto, and the Greens have fronted their manifesto with a call to improve the energy efficiency of our existing homes), the one garnering the most public attention is, unsurprisingly, the Conservative pledge to extend the right to buy (and its attendant discounts) to housing association tenants.
We are still working out the details on how the Tories think this would work in practice, but from the manifesto it would appear that:
- Councils will be required to sell high value homes when they become empty, and then give the money to the government so that it can be passed on as discounts of up to £102,000 to those living in housing association properties. This would effectively mean a loss of two affordable rented homes, not just one.
- The Conservatives also think that they can raise £17.5bn to support this policy. If this money were invested in new shared ownership properties, then we would be able to build a million homes over the course of just one parliament.
But will the policy actually deliver new affordable homes? For the answer to this question it’s best to look at the past.
According to government figures 1.88 million council homes in England have been sold under the right to buy (37% of total stock), while local authorities have built just 345,000 homes over the same period (DCLG). So clearly we’ve not seen a strong replacement rate.
Since 2012 with the government reinvigorated right to buy, and strengthened their commitment to replace homes sold, fewer than half the properties (46%) have actually been replaced. And finally, about three-quarters of local authorities have said that they only expect to replace half or fewer of the homes sold under right to buy.
Housing associations are working hard to deliver affordable housing, often seemingly against the odds. To do this they invest £6 for every £1 that the government invests in affordable housing. This investment would be seriously undermined by the extension of right to buy as lenders may be less willing to provide such good rates to housing associations if there is a significant threat to those assets.
Rachel Fisher is head of policy at the National Housing Federation