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Why right-to-buy will implode Britains fragile housing market

JOE HUGHES 16/04/2015

The Conservatives recently announced their intention to extend the Thatcherite right-to-buy scheme to 1.3 million families in housing association properties - we've done our homework & outline here just what the problem with this simple short term solution to a complicated long term issue is


Right-to-buy gives tenants of council housing the opportunity to buy their home at a discounted price; originally a Thatcher policy in the 1980’s, it was brought back by her adopted son David Cameron in 2012 & he has just announced the intention to extend this to housing association properties.  This potentially gives the opportunity to 1.3 million families to own their home but sadly isn’t as simple as that. Firstly, the housing associations in charge of said properties are threatening to sue the Tory’s should this policy be enforced. It could cripple the most effective public/private partnership in the history of the nation; Housing Associations account for a large number of new rental & market properties & contribute to the local area they build in, governments also pay next to nothing to help these properties get off the ground; for every £1 government spends £6 is put in by the associations. We should be protecting these rather than dismantling them


A key point here is that councils are been told to sell off their most valuable homes to fund this policy meaning 2 homes are lost – 1 the housing association must sell and the other the council sells. This is the key point as it uncovers the real reason the Tory’s are introducing this policy; to allow private landlords to get their hands on the most valuable council properties at a cut price cost. While the housing association will receive the market value – topped up by the government, the council property will be sold at a discounted price – should councils be selling off their most valuable assets at discounted prices in such delicate economic times?


There are also the financial implications; last year just £100 million was raised from selling off council homes yet it will cost £4.5 billion a year to fund this policy. On the face of it it’s clear this is a plan geared towards gaining votes from the working classes, but at a cost of £4.4 billion a year of tax payers money – they have no right to do this. We are constantly told of the ‘housing crisis’ in this country and most experts have said the requirement to end this is by building new homes & renovating the countries millions of empty homes. Selling off homes does little to nothing in terms of helping the housing crisis & money we are willing to spend on housing should be going on sorting this rather than simply selling homes already lived in


There is also the morality & fairness of this policy. While for some of those in the houses effected it will be a good opportunity to realise their dream of owning a home the bigger picture notes that this isn’t a priority in this country. I mentioned the housing crisis earlier; 9 million people live in rented accommodation, many at inflated prices – what happens to their dream of owning a home? Most do not qualify for social housing & are paying the astronomical prices of the bloated private rental market meaning they are unable to save for a deposit, essentially stuck in an endless vicious circle – why are they forgotten about? 3 million adults live with their parents, unable to afford the private rental prices & unable to qualify for social housing – why are we not looking at creating more affordable private rental properties for these lost people? 5 million people sit on social housing waiting lists as you read this – surely the main objective of any fair government should be to help these find housing as soon as possible? This previous figure includes 90,000 children who are homeless, flitting between grubby hostels and constantly moving schools – why are we not pumping £4.5 billion into finding a home for these?


The reality is any money raised from this policy is likely to go directly into the hands of private landlords – and the Tory’s know it; 25% of Tory MP’s are private landlords themselves. While the housing association homes can only be bought by tenants living in them for 3 years there are no rules over who buys the council homes – it’s inevitable they will end up bought by private landlords, already cash rich & looking to extend their portfolio – they will then increase the prices to be in line with the private market & force those who cannot afford this into the cycle of homelessness & further increasing the pressure on councils. 36% of homes in London bought under the right-to-buy scheme are now let out by private landlords crippling the fragile London housing market. This final point is the real reason for this policy though – the Tory’s don’t care about working class families owning their own home, they care about them & their friends profiting while they can from a housing market ready to collapse in on itself. The extension of the right-to-buy scheme will inevitably end up imploding the housing market, particularly in London & who will be left to foot the bill? The government?  The Conservatives?  The private landlords responsible for inflating prices? No, the tax payer of course


The housing crisis needs new homes building, regulation of the private rental market & the millions without adequate housing moved into secure affordable homes, we do not need our councils most prized assets gifted to wealthy, covetous landlords