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I read an article recently in the FT (not my usual rag I need to say), summing up the new RTB changes perfectly. It described it like playing musical chairs and being lucky enough, for the music to stop and you cop for a big discount, to buy your social housing property. You have won the lottery!
As if anyone who understands it, needs it explaining, the reason we have social housing is to provide an affordable roof over the heads of poor and low paid people, who otherwise would not be able to afford to rent, at market rates in the PRS (Private Rented Sector), or take on a mortgage.
We are told that councils will fund this sale and a new property will be built.
This all sounds magical until you realise that historically, less than 10% of property sold under right to buy, ever got replaced. This means that a low rent property is lost, creating a shrinking pool of affordable places to live. Most councils except in central London, don't have larger properties that could be sold in this way. So funding is less than guaranteed.
If you doubt this record of replacement, look what happens in my locality. Only 2 homes built to replace the 863 sold off under Right To Buy in Greater Manchester . Pretty pitiful eh?
While Benefit Street makes good telly, it really doesn't reflect reality in social housing. I grew up a council house. My own parents and probably over 9 out of 10 others, paid rent each fortnight and had pride in their home. Today's social housing tenants are mostly working, but many low paid, doing low skilled work, many more than one job and often with little job security.
If a tenant qualifies for full housing benefit for a social rent, then you and I, the taxpayer stumps up about £85 a week. This new proposed policy reduces the pool of affordable low rent properties, so if someone then becomes statutory homeless, the local authority can only push them to the PRS or hotel B&B accommodation, at possibly three or more times that value. So this costs the taxpayer more, not less. Then if the buyer cannot fund the mortgage, that's one less property in the affordable housing pool.
While we are at it too, let's tackle that word 'Affordable'. You often see it banded about and the coalition invented it as double-speak, to mean 80% of a 'Market Rent. Actually, that means someone on low pay could not actually 'afford' that could they?
Social Housing providers in the 1990's used to obtain grant to build new properties, they now can access, about just a fraction of that, under the condition they build (un)Affordable rent properties.
It has been said by some that this is a policy for social cleansing. In London, for one place it is feeling like that. There, even two well paid people cannot even consider doing anything but rent at high rates in the PRS for the rest of their lives. This policy will further ramp up house price inflation, taking a mortgage ever more out of reach.
Supply of more property of different types and tenures is what would actually ease the housing crisis.
Turning to practicalities, this policy is estimated to cost in the region of £12b and A bill will be required to 'sequest' the assets of Housing Associations, to allow these new RTB sales. In the common UK conscienceness, social housing is synonymous with 'Council Housing'. This is wrong as most HA's have not been linked with LA's for a decade or more.
HA's have had to find funding outside of Westminster, as mentioned, that stopped some time ago. A policy like RTB is already spooking investors & bond providers. This means funding to build will inevitably reduce for HA's and the costs increase. That's if loans are available at all.
Using the logic that rental providers should be offering tenants the aspiration to own their own properties, why are not Private Landlords included in the bill? Somehow, I cannot see the 1/4 of MPs in parliament who have rental property portfolios voting for that one, can you?
This policy is being branded 'aspirational', which is a very Tory value. I agree with aspiration. Providing aspiration is welcome, but handing over windfalls on a plate, to exacerbate an existing dire housing crisis, push up house prices / rental costs and the HB ever higher, at a cost of £12b is lunacy.
For goodness sake, make sure social housing staff understand these facts, their friends, family, MP's, local house of lords members, anyone who listens, needs to know what is happening.
It will be too late when your kids in their 30's & 40's, are still living with you as they cannot afford a place of their own to rent or buy. Then the general public might be asking "Where's my right to decent affordable housing"? By then the fight will be over, our time in #UKhousing will have passed.
Related Post: Another hour of your life you wont ever get back. Are you spending too long in meetings chum?
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Beastie Boys - Fight For Your Right...
(c) Tony Smith, Acutance Consulting www.acutanceconsulting.co.uk 07854-655009
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