The Tory Government have announced that they plan to proceed with their plans to extend Right To Buy to housing association tenants. I don't know if there are any listers on here that will be pleased because it benefits them but I'm sorry but I think this is atrocious and just compounds the damage done by Thatchers original RTB policy in the eighties.
I have just the following questions I'd like to ask this Government
1. Why should social housing tenants have the right to buy at massive discounts ? Private tenants who pay more rent do not have this right.
2. Why as a tax payer should I financially contribute for them to do so. This latest scheme is going to cost the country a fortune as they reimburse the HA's for their losses
3. The Govt say that there will be a 1:1 replacement of properties sold. One built with the proceeds from the sale. How long will that take even if it financially works ? A property can be sold under RTB within three months, a new scheme takes over three years from acquisition of the land to plan and build. How does the shortfall in housing for the homeless and those in need get picked up in those three years ? Stuck in bed and breakfast I suppose.
4. Housing Associations rely a lot on loans secured on the value of the properties to build new homes. This is even more so since the Govt reduced the grant towards the costs to very little. These loans will be a lot harder to get as their stock value reduces considerably. That will mean less homes built.
Hopefully the HA's will be able to make a successful legal challenge to prevent this and maybe the Govt will be pleased if they do because they can shrug their shoulders and say to those who voted for them because of this promise, "we tried but those wicked HA's have stopped us".
Rant over....
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Comments
2.You shouldn't.
3. Ages.
4. There isn't a question there.
Why shouldn't Council/HA tenants have the right to buy their property? As long as that property is valued fairly and the discount takes into account the number of years you've lived there.
Peoples situations change as they make their way through life and if the opportunity comes to own your own property and it's that little bit easier or within reach because of a discount, then we should be encouraging people to take on the responsibility. As long as you are prevented from selling on within (say) 5 years, I don't see the problem.
The scheme will probably cost less than the latest first time buyer inducements. And don't forget, you can't get Housing Benefit on a Mortgage, like you can for rent.
Housing Associations already sell plenty of properties on the open market - at least this way, they will be going to residents rather than property speculators.
Funders are falling over themselves to lend HAs money at the moment - particularly those who show surpluses every year and whose gearing is in place to manage future changes. The current favourite way of raising money by HAs is on the Bond Market. They are extremely tightly regulated and funders love the controls that brings.
And as for 'stock value reducing considerably' - it just doesn't happen. HAs just don't sell houses for less than it cost them to build. They can also build them much quicker than they actually are - but there are quite a few things to bring together, particularly when you're developing brown field sites.
HAs will just have to get on and manage the situation, instead of getting indignant because their little 'empires' are being controlled.
Oh, and please tell me what damage was done by the original RTB scheme? Real facts and figures would be useful though rather than dismissing it because it involved "Thatcher".
Nothing wrong with the policy and it's good people got great discounts and bought their own houses. It would have been smart for the government to make the discount repayable if the home owner sold at a profit, to help out with building new social housing.
Not a patch on the £3m home that Thatcher-basher Ben Elton owns in London, and only uses for the 6 months he is not in Australia.
There will be plenty of homes by 2027 when the UK population is predicted to reach 70 million and the green belt will have been built on.
As for Thatchers sell off, come on half my mates bought there mum an dads or grand parents council house purely to make money ! Not so they could be part of the great property owing society ! Then sat there waiting for them to die and reap the rewards.
Alternatively, put my name down il have one for my kids who cannot afford to buy !
For those wondering why the original Right to Buy was bad, it is chiefly about not replacing those properties. There's nothing inherently wrong with having a mortgage, just as there's nothing inherently wrong with renting (though the lack of security in the private sector makes it difficult in this country). Many of the flats on estates bought under right to buy are now either owned by buy-to-let landlords or rented back by the very councils who had to sell them off. And of course, all are rented out at much higher rents, so that a lot of them that are leased back are only affordable by people on housing benefit.
Instead of giving a discount, what about giving 30k cash to people who want to buy house? That way the housing stock is kept and the ones who want to take on a huge mortgage can.
Most people in these houses are not wealthy and to complain that those that have been renting these properties, in some circumstances for many years, are not allowed a discount to buy them macks of selfish greed by those that don't want to someone else getting anything that they can't have.
It frees up money for investment and moves the responsibility for the house to someone else - why shouldn't they benefit from taking that responsibility away from the tax payer?
Sometimes I find it staggering how we can be so selfish and so greedy that we can bulk at someone worse off than us being given a helping hand!
Its like giving the Olympic /stadium to West Ham. Great if you're West Ham.
You could even argue that this levels the playing field and could act as a vehicle for social mobility - by allowing people to own their own property and freeing up HA resources.
Sure there will be one or two that will 'cheat' the system and benefit from an unwarranted discount, but I don't think that justifies shutting down the scheme completely so that the public can be sure that no one, at all, benefits unless they are desperately poor.
Largely HA tenants belong to that group who require extra help; perhaps with the exception of those who are born in to HA property and then seem to have priority when they decide to move out.*
*A case in point is a young woman I know, a recent graduate at 22 with a £26k salary, she will soon be moving in to a HA property courtesy of North West Kent Housing Association. She grew up in one and thus takes priority.. Is that right? No. That's not an issue with RTB though - it's an issue with the poor existing rules.
-> It lessens the strain on Housing Associations, as no longer do they have to provide call-outs every time "Mrs X's lock is a bit stiff" or "Mr Y's tap is making a peculiar sound".
-> It allows those who are less well off to get a foot on the property ladder, potentially giving them financial benefits which could last multiple generations.
-> If they own their own property then it would suggest they are not taking Housing Benefit or similar from the state.
This goes deeper than 'candy for the less well off', and has potential gains for the economy and the tax payer, housing associations (and thus, those in need) and those tenants themselves.
We only have to look locally towards Dartford to see the effect that abandoned properties have on an area.
It's all explained here - https://fullfact.org/factcheck/economy/Extending_Right_to_Buy-43704
Having a warm dry place to live is a basic human right which is why social housing stock is provided by the state, in some cases at zero cost to the inhabitants - that's your helping hand. Home ownership is not a human right and its not the state's responsibility to directly help people buy houses.
Essentially you'd have to ensure that the money invested in building the property is under 65% of the final price after 5 years of market changes. You would also have to factor in the profits that the Housing Association will be making on those tenants over 5 years, so subtract 5 years rent (albeit subsidised) from that figure.
That still sounds like a stretch to break even over though, I may be wrong? Although it is worth remembering that only 25% of HA tenants are estimated at being in a financial position to take the offer up. In essence, if that 25% bought their properties outright it would leave the HA's to look after those tenants who genuinely require assistance and would have those who exercised their RTB as contributing more to the economy and being in a stronger financial situation.
It talks about the Brownfield Regeneration and how the receipts will be split, but admits it is unclear about where the receipts will be divided up later on. It is also explicit that since the govt promised the same in 2012 when it expanded discounts for right to buy, the replacement rate has been around 1 in 10, which is a long way from 1 to 1. The final note is that the IFS reckon that this scheme risks reducing housing stock even more.
She is now widowed and retired although has probably paid the mortgage that Margaret Thatcher offered her in the 80's 10 times over.
So I am in a position to buy her place as she will get the full discount meaning she is happy as financially secure and we are both happy because I am investing in the future for my children when she and I kick the bucket.
Once again Maggie got it right..
I predict, much like the last RTB scheme, housing estates with fewer properties for rent for the people they were intended for and a marked increase of private landlords renting out poorly maintained houses/flats that were once well maintained. An increase in people seeking a place to live because the houses that were promised (1:1) were not built even close to that ratio. Also there will be the same problem of evicted people living sad squalid lives in HMOs that we have now because of our current shortage of HT/council houses.
I do not understand why there is this obsession in this country to hock yourself into debt just so you can have this fantasy that you are in some way better off than you were renting the same house. Surely if you couldn't afford a mortgage last year you will probably struggle this year.
I'm not the type of person that resents others getting on, quite the opposite actually, but I really do think this is policy will make a huge problem now a massive one 10/15 years down the line.
Your points about the financing of the scheme are 110% correct though, and I agree with them. I enjoy the idea of Right To Buy but the financing of the scheme certainly needs some more thought.
The plan fails to take in to account London at all - your point about Bromley and Bexley (whilst true) is just symptomatic of an overall problem regarding the funding. Supposedly regional averages will be used, so the prices aren't done via the LA's catchment area, in which case some LA's will simply be unable to have any properties as they will be in the regional top 33% due to location alone - and not quality or size.
Additionally, it also relies upon quite a high turnover of the expensive properties as they need to become vacant before their value is released. Something tells me the more expensive the property the less likely it is to fall vacant in the first place.
I will admit it will be a real concern if the replacement rate doesn't improve, especially as we need more housing stock as it is. However, the Local Authorities are supposed to be replacing any properties that they have to sell, and the Housing Associations will be reimbursed to the market value of the properties that they sell - providing them with funds to invest in new properties. Whether this will allow a 1:1 replacement rate remains to be seen, but I do feel that this is the minimum that should be aimed for.