Government’s Right to Buy announcements will make it harder for people to find homes
“Our aim is to make sure everyone has a decent home they can afford, but this week’s sudden Government announcement to extend the Right to Buy scheme to social housing providers is a damaging raid on their assets.” Cllr Marianne Overton MBE, leader of the Local Government Association (LGA) Independent Group of over 3,000 councillors is not impressed.
“The announcement may have diverted headlines this week and certainly takes money from social landlords into Government coffers since Government takes a significant portion from any sale. What social housing provider is going to invest in building new houses if they are then forced to sell at well below market rates, stripping them of their assets?
“All housing providers should be able to decide their own discounts and reinvest all of the funding.”
“Our Independent Group Think Tank met this week, and is also concerned that Government is encouraging more people on lower incomes to borrow money at a time when interest rates and inflation are rising and to take on the ever-increasing costs of running and maintaining a property. We see cases of that cost often being under-estimated, resulting in some poorly maintained properties or bank reclaims and homelessness. The UK Housing Review 2022 showed the policy has already led to a significant erosion of much-needed social housing and at a considerable cost to the taxpayer. Promises of full replacement have not materialised, yet the need for affordable housing is as great as ever.”
“We need a mixed economy with homes that are energy efficient, well maintained and affordable, not schemes that risk leaving more people struggling or homeless.”
Loic Rich, the Independent lead on the LGA board for the Environment, Economy, Housing and Transport added;
“Many people might find themselves better off with fewer financial obligations by renting their own home, rather than being “owners” in hoc to the bank, with the additional burden of paying for maintenance and structural repairs.”
Looking at the detail, Cllr Overton added, “Currently the right to buy effectively gives publicly-owned goods to those who are rich enough to afford to buy. The Government takes a further tranche of the cash from a house they do not own, leaving the housing provider stripped of assets and unable to afford to build replacement. That makes it much harder for people to find a decent home they can afford.
References:
Government Announcement on extending the right to buy https://www.gov.uk/government/news/right-to-buy-extension-to-make-home-ownership-possible-for-millions-more-people
UK Housing Review 2022: file:///C:/Users/Overtonmarianne/Dropbox/My%20PC%20(Mariannehome)/Downloads/UKHR-2022-Executive-Summary.pdf
Government Discount Calculator: https://www.ownyourhome.gov.uk/scheme/right-to-buy/can-i-afford-it/right-to-buy-calculator/