Government defends Right to Buy against call for abolition

Government mouth pieces defending the indefensible – in my humble opinion. The most senior of them conveniently sidesteps a key question from MPs, ‘If you sell a house at a discount, how do you buy another one to replace it?’. Answer, ‘Spend what money you do get, fixing up the houses you’ve already got’. That’s helpful isn’t it.

The MJ online By Martin Ford | 22 January 2019 

A top Marsham Street official has defended the Government’s Right to Buy policy as ‘good value for money’ following demands for its abolition.

The scheme came under fire from MPs and the London Assembly this week, when it was accused of undermining councils’ efforts to build social housing and sapping funds.

At yesterday’s meeting of the Housing, Communities and Local Government Committee, Labour MP Liz Twist said: ‘How can you expect councils to invest in new social housing if they have to sell the house at a discount under Right to Buy?

‘It seems a bit strange we are wanting councils to build and yet they are having to sell these houses at a discount down the line.

‘It doesn’t seem to make financial sense.’

Permanent secretary at the Ministry of Housing, Communities and Local Government (MHCLG), Melanie Dawes, said: ‘What we get in terms of economic benefits is that housing associations have receipts they are able to build with so we get the usual benefits from new housing supply.

‘We also get distributional benefits because generally we are talking about lower-income families who are able to buy who otherwise wouldn’t be able to.’

Highlighting London Assembly research published that found 42% of Right to Buy homes sold in the capital are now in the private rented sector, committee chair Clive Betts said: ‘It’s unfortunate many of them end up as buy-to-let properties.’

The London Assembly research by member Tom Copley also found the capital’s boroughs spend £22m each year renting back right-to-buy properties.

Mr Copley said: ‘Something has gone very wrong when tens of thousands of homes built to be let at social rents for the public good are now being rented out at market rates for private profit, sometimes back to the very councils that were forced to sell them.

‘Right to Buy is failing London and should be abolished.’

Cllr Darren Rodwell, London Councils’ executive member for housing, said: ‘These figures reveal the immense costs and inefficiencies caused by misguided policy at a national level and, with boroughs enduring a 63% cut in core funding since 2010, it’s clear we can’t carry on like this.

‘The Government should end its restrictions on the use of Right to Buy receipts so that all money raised from council house sales in London goes back into building more homes.’

MHCLG director general, Jeremy Pocklington, told the select committee: ‘We think it is good value for money.

‘The case for Right to Buy is it helps people into home ownership that would not otherwise be able afford their own home, which is something this Government strongly supports.

‘It does release resources that councils can use to invest in their stock.

‘While homes are being sold – which is enabling people who would not otherwise be able to own their own home – a great many more homes are being built through all the interventions, looked at in the round.’

Is Right to Buy a state sponsored gentrification programme?

It’s probably a bit late to ask this question, given that this scheme has been in place for 30 years now.

That said, the proof must already be there, especially in London where working class areas, that were a foreign land for those with means, are now fashionable and sort after locations for the young professionals, earning big money.

Exposing social housing to the open market , in high demand areas, where demand is the through roof and prices constantly rising, inevitably means the original tenant, very soon becomes the ex-owner.

It might seem like a a very worthy ambition, giving everybody currently sitting at the bottom of the pile and trapped in social housing – as certain people view it – a chance to own their own home.  However, assuming that hat  was even the original intention and it wasn’t just about killing off the bulk of social housing as we knew it, it’s also had the effect of depopulating our city centre of those of modest means, otherwise known as the working classes.

So all those people who used to empty the bins, sweep the streets, dig up the roads, drive the delivery van, serve in the local shops and do the thousand and one other menial, but vital jobs that keep a city running, now live a journey away from their workplace.

in some cases that journey may mean up to an hour spent on a bus, or train, travelling in from a remote housing estate where everybody else is doing exactly the same thing.  The effect of this, is that nobody actually knows who their neighbours are anymore and therefore certainly little, or no sense of community, because there’s so little actual time spent in the company of those who live near us.

Back in what used to be the social housing areas that haven’t been flattened and turned into expensive apartment blocks for the upwardly mobile, the housing has been gutted, extended and beautified, to make it desirable and more importantly, significantly more expensive than it was.  Again, just like the workers they displaced, the lack of community will be clear, but this will be by choice in most cases, because their social lives take them elsewhere and opportunities more diverse.

Job done.  All those rundown, poorly maintained sink estates cleared out from our city centres And that ‘unpleasant’ working class riff raff removed to where it belongs, when it not actually doing the work that needs doing.

The added bonus is, those who grabbed the social housing as soon as the first tenants where starting to sell, can now maximise their returns, over and over again, by renting to the high earners who need to live close to the city centres.

If Right to Buy was really about getting those of modest means on to the housing ladder, it was a fatally flawed concept.  It depopulated our cities of the ordinary working class people, by selling off the only type of housing they could ever have afforded to live in.  If that was always the intention, shame on you Margret Thatcher.

The Housing should have been retained and those who wanted to buy their own property should have offered equivalent grant funding to purchase their own home elsewhere.  This could have been in a privately built, or publically funding housing developement, such as in the new towns.

It was claimed that this would have forced people to move out of houses, or places they’d been in for many years and possibly spent money on.  This is complete nonsense and just a smoke screen used by government to justify to the orignal scheme.

Why should social housing tenants have been given that benefit on top of the massive discounts they received for the ‘equity’ they’d supposedly built up?  How was they were any more entitle than somebody forced to rent a property in the private sector, where the end of lease meant the most you were likely to get back was your deposit if you were lucky?

 

 

 

Yesterday’s headlines hid the reality that Westminster still doesn’t trust, let alone believe in local government

So it seems the Daily Telegraph was actually paraphrasing Theresa May’s speech and using the term council housing, to mean social housing.
The £2 billion headline will be money for the housing associations to put very nicely into the hands of private developers via the various deals and conjurings that go on once a section 106 affordable housing obligation is in play.
A wasteful and time consuming process at the best of times, £2 billion will soon disappear as each sides legal teams dance around the various council and housing association offices.
Why not take a holistic approach to our national disgrace of failing to provide decent housing for those in the most need?
The introduction of land value capture, would allow councils to aquire land at a sensible price, thereby making the most of any share of the £2billion on offer.  This, combined with greater borrowing flexiblity, would offer a far greater return for the money available and more certainty of delivery.  It would also ensure that this desperately needed housing, was being managed by those who best understand their communities.
Inside Housing

LGA warns May’s focus on associations ‘misses the point’ about council-led building

The Conservative head of the Local Government Association (LGA) has hit back after Theresa May suggested councils are not able to build at the same scale as housing associations.

Lord Gary Porter, chair of the LGA (picture: Tom Campbell)

Lord Gary Porter, chair of the LGA (picture: Tom Campbell)
Sharelines

Councils hit back after May comments #ukhousing


In a landmark speech to the National Housing Summit today, the prime minister said she wants housing associations to lead on creating “large-scale, high-quality developments” because the sector can “achieve things neither private developers nor local authorities are capable of doing”.

She pointed to the Thamesmead Estate in south east London, which is currently being regenerated by Peabody after two councils had “problems dealing with the unique challenges and opportunities” of the project.

But Lord Gary Porter, chair of the LGA and leader of South Holland District Council, said Ms May’s comment “misses the point about why we are not able to build at scale”.


READ MORE

Councils’ temporary accommodation spend nears £1bn
No appeals for councils excluded from £1bn borrowing programme
No appeals for councils excluded from £1bn borrowing programme
On the naughty step with Lord Gary Porter
On the naughty step with Lord Gary Porter

“Since RSLs [registered social landlords] took over building social housing they’ve built around 40,000 a year, we have never got to the numbers we need to have as a country,” he told Inside Housing.

“That’s not to blame the RSLs, it’s because we have not been part of that mix as councils.

“And what we need to do is get the Treasury to get off our backs. I don’t need more money, I just need freedom so I can spend my money.

“Let me deal with Right to Buy in the way that works for my area and then get Housing Revenue Account debt off the government balance sheet because there’s no need for it to be there – and then job’s a good’un and we can start fixing the housing crisis before the end of parliament.”

However, Mr Porter did also praise the prime minister for emphasising the value of social housing.

In her speech, Mrs May said the rise of social housing “brought about the end of the slums and tenements, a recognition that all of us, whoever we are and whatever our circumstances, deserve a decent place to call our own”.

In a statement, the LGA said: “Councils have always been proud of their housing and tenants and the positive recognition of social housing by the prime minister today must be shared by all.”

The government has offered councils £1bn of additonal borrowing headroom to build new homes, but this is limited to areas where there is a large gap between private and social rents. It will not be available until April 2019.

Councils have long called for caps on the amount they can borrow to be lifted to allow them to build new social housing at scale.

More on Theresa May’s NHF speech

More on Theresa May's NHF speech

All our coverage of Theresa May’s historic speech on 19 September, 2018, in one place:

Orr: ‘penny has dropped’ for government on housing The outgoing chief executive of the National Housing Federation gives his take on May’s speech

LGA warns May’s focus on associations ’misses the point’ about council-led building Reaction to the announcements from Lord Gary Porter, chair of the Local Government Association

Sector leaders hail ‘huge significance’ of May’s NHF speechHousing figures welcome the Prime Minister’s speech to the National Housing Federation’s annual conference in London

May’s speech shows a significant change in attitude towards the sector When was the last time a Conservative prime minister made a speech more favourable to social housing?, asks Jules Birch

In full: Theresa May’s speech to the National Housing Summit The full text of the Prime Minister’s historic speech

Theresa May throws support behind housing associations in landmark speech Read more about Theresa May’s speech which signalled a change in tone from the government towards housing associations

May’s new £2bn funding will not be available until 2022 Homes England clarifies the timescale for allocation of the new money promised by the Prime Minister

Morning Briefing: Labour hits back at May’s £2bn housing pledgeShadow housing secretary John Healey says May’s pledges are not enough

May to announce £2bn for strategic partnerships with associations at NHF conference The details released overnight ahead of the speech