The housing secretary is considering abolishing [Right to Buy] for newly built council houses and cutting the discount offered to existing tenants.
The deputy prime minister is facing growing pressure from local authorities to reduce the cost of Baroness Thatcher’s flagship policy, and a consultation on proposals will be launched in October’s Budget.
More than 100 local authorities called for the scheme to be axed on new council homes in a damning report into the state of Britain’s housing stock published on Tuesday. The report, commissioned by Southwark Council, said the policy was helping to burn a £2.2bn hole in local authority accounts and exacerbating the country’s housing crisis.
Ms Rayner attended an “urgent meeting” with local authorities last month to discuss housing reforms. The Ministry of Housing and Local Government told The Telegraph: “We are working at pace to reverse the continued decline in the number of social rent homes.”
[…]
In Southwark Council’s report, local authorities said Right to Buy had created “a serious problem for the sustainability of England’s council housing”. Ms Rayner said in the summer that the Government was considering protections for new council homes.Discounts on the scheme can reach as much as £75,000 outside of London, and over £100,000 in London. The cap, which is based on how long a tenant rents a property before buying it, is limited to £136,400 in London.
[…]
In the last financial year, 10,896 homes were sold through Right to Buy and only 3,447 were replaced, official figures show – resulting in a net loss of 7,449. Since 1991, the scheme has resulted in a net loss of 24,000 social homes.This is partly because under the current system, councils can only keep a third of the receipts from each sale to build a replacement home, with the rest going to the council and government for other purposes.
Can a UKer explain the specifics of council housing? Is it housing you have to qualify for through low income?
I fucking hate Thatcher but it seems like a program that lets people buy the house they’ve been living in for so many years is a good idea: the problem is that the government doesn’t build more housing from it and subsidizes the sale, right?
Correct.
You qualify through low income, and as the list to get council housing is long, need is taken into account also.
Right to Buy allows council tenants to buy their homes at a substantial discount on market value. This is alright, as it promotes stability and gives tenants equity, but at the same time, council tenants don’t get evicted anyhow, even if their income has become very high, and you can pass on a tenancy when you die if a relative was living in the council house with you.
But the money from the sale of council houses to tenants does not get ploughed back into buying or building more council housing, and the people who bought them can in turn sell them on the open market rather than back to the council.
This has made it near impossible for councils to maintain levels of housing stock, let alone increase it to reflect population growth. In central London, many types of essential worker are hard to obtain as too few can afford to live within commuting distance - large & high quality housing estates in the centre and all through the Boroughs having been sold off under the scheme long ago & snaffled up by developers.
Thatcher brought it in as a populist policy, and to weaken state services, but every other PM after permitted the policy to carry on unaltered.
That’s the gist to be honest.
RTB gives people the right after a certain amount of time, but lack of funding meant that councils weren’t able to replace the stock.
The discount is up to 70% too. So while each person who can exercise RTB gets an impressive leg up into the housing market, it’s contributed to even longer waiting lists for council housing.
It also creates a bit of an ethical dilemma if you are in council housing.
As if you start doing better financially, and are able to afford regular accommodation, you have an incentive to hold until you can RTB instead. (Though there are apparently now re-assessments at tenancy renewal time)
Really, the answer is way, way, way more council housing. But the money just isn’t available.
Right-to-Buy is a good idea in theory, but the problem is that the social housing that’s then taken off the market isn’t replenished, so there’s fewer houses available for people who can’t afford to buy or rent privately.
Yeah it sounds like the real issue is lacking reinvestment.
I mean isn’t the Viennese model of social housing something like that?
Before Thatcherism introduced the idea that everyone should own a home, council housing was there to provide a good home to anyone who wanted it. Affordable rent, modern amenities and upkeep, as well as the ability to pass the tenancy of the home to your children. If you needed or wanted to move area, another council house should be available for you. The concept was amazing. Then the notion was ingrained in the culture that people had to own their own homes, the councils were forced to sell their housing stock cheaply, given no money to replace it and, voilà, we have todays housing market. But we can all rest easy knowing that the private property developers that lobbied the change are happy, right?
Easier to show you the process. It’s by council , so each can have different rules, but Southwark has been the council with the most council houses for a long time so it’s a good enough example. Basically you need to have lived there a while and not own your own home. Getting to the top of the list is probably harder than getting on it.
And yes the problem is the councils are banned from borrowing to build housing or using proceeds from selling to build more as I understand.
https://www.southwark.gov.uk/finding-a-new-home/looking-for-a-home?chapter=2
If I remember correctly, the problem was the scheme explicitly forbade the council from building a replacement house.
I think that was later changed, but by then the damage was done and the housing stock was decimated.
I do think you should be able to buy a council house that you’ve been living in if you want, but at the full market rate of building another equivalent home, and it should be enforced that they do build another. If a council currently has no plans for building more, then tough titties, you’ll have to go on a waiting list.