Right to Buy to be extended to housing association tenants
Giving council tenants the right to buy their home was one of Margaret Thatcher’s flagship policies during her tenure as prime minister, and more than 30 years later, David Cameron sought to rejuvenate the policy by offering social tenants discounts of up to £75,000.
But a long-standing criticism of Right to Buy has been that the state has failed to adequately replace the social homes that have been sold off, and that this has led to a shortage of social housing across the country.
So why is the policy back in the news? Well, Boris Johnson is seeking to breathe new life into Right to Buy, after announcing that 2.5 million tenants renting from housing associations will be given the right to purchase them outright, and committing to replacing every single home sold.
However, the announcement has received a mixed reaction, with critics warning it could exacerbate supply issues in the social housing market. At the same time, some have dismissed it as an effort by Mr. Johnson to reinvigorate his premiership following a vote of confidence among Conservative MPs, in which four in ten voted against him.
Labour leader Sir Keir Starmer, unsurprisingly, led the political criticism, saying, “For people who want to buy a house, affordable housing, this is not the answer. They know it’s not the answer. I don’t think this is actually going to happen.”
Homeless charity Shelter was also critical, warning that extending Right to Buy will “put our rapidly shrinking supply of social homes at even greater risk”, and arguing that the government should instead focus on building more secure social housing.
Polly Neate, chief executive of Shelter, said: “The Prime Minister’s housing plans are baffling, unworkable, and a dangerous gimmick.
“For decades, the promise to replace every social home sold off through Right to Buy has flopped. If these plans progress, we will remain stuck in the same destructive cycle of selling off and knocking down thousands more social homes than get built each year.”
The Right to Buy extension was one of several new housing announcements from Mr Johnson, who said he also wants to help more people on housing benefit get on the property ladder.
Under the new proposal, welfare rules will be changed so that housing benefit claimants who are in work – about 1.5 million people – have the option of using their benefits towards a mortgage, rather than automatically paying it to housing associations and private landlords.
Lisa Nandy, the Shadow Secretary of State for Levelling Up, acknowledged that helping more people get “the security of their own home” is a “great idea” in principle.
However, she said the government has not “thought through the detail” and that there is “no sign that any of the lenders are on board with this”.
“The government can say that it wants to open up mortgages to people on housing benefit, but unless the lenders agree to do it, it’s not going to happen,” Ms Nandy said.
She also pointed out that people are only eligible for universal credit if they have savings of less than £16,000, which means many of those the government wants to help won’t have “anything near the amount that they need for a deposit on a home in order to qualify for that mortgage”.
So does Mr. Johnson’s announcement represent a watershed moment for housing affordability and access to the property market, or is it the act of an embattled government trying to move the agenda on after a torrid few months?
It remains to be seen, but we will keep a beady eye on developments in this sector of the housing market and how it will affect the wider market.