In the fight against the housing crisis, some things are more obvious than others.
I have never thought (even when it seemed to be working) that selling off Council Housing was a good idea. In the present crisis it seems like madness. Yet this government, far from looking to stop it, wants to take things further!
Why? What possible arguments could there be in its favour?
The Pros and Cons of ‘right to buy’
When researching for this post I came across this article in the Guardian, written in 2002, which sets out the pros and cons of right to buy.
Here is a brief summary:
The pros of right to buy
- It allows people who would normally never be able to afford to buy property to do so
- Owning property gives people financial security
- Owning your own home is no longer the preserve of the middle and upper classes
- It gives people something to show after years of paying rent
- It gives people something they can pass on to their children
- The equity in the property can be used for the cost of care when owners become old
- Having a mixture of owner occupiers and rented accommodation helps create a mixed communities
- The presence of economically active households reduces the social exclusion of an area
- If you own your own property you are more likely to look after it and your local community (and less likely to trash it).
The cons of right to buy
- It has reduced the amount of social housing as Councils have not been able to build or buy new properties to replace those sold
- The right to buy created social housing deficit which is particularly acute in areas of greatest housing need – such as London and rural areas
- Council housing was built to benefit the community not individual families – it is unfair that certain people have made a financial gain out of what is a social asset
- Former Council homes can prove difficult to sell
- The system is open to abuse with private property companies often profiting from scams
- People who cannot afford to buy their council house are further marginalised
- Local Authorities have suffered with all the good properties cherry picked leaving them to manage the worst properties no-one wants to buy
- Major repair programmes are more difficult on blocks where there have been a large proportion of right-to-buy homes and Councils are often unable to recover the cost from right to buy owners.
That article was written in 2002, fifteen years ago.
The picture today
Most of the points made by the Guardian in their article still apply today. However we also have a major shortage of affordable housing which in no small part is due to the sell off of much of our social housing stock.
In the light of this it seems increasingly unfair that a few families are able to benefit from buying their Council home.
Speaking personally – I am very happy for my taxes to be spent building houses so desperate families to have somewhere to live.
However I am not at all happy about those families then being given a windfall of up to £100,000 or so under the right to buy. Whats fair about that? They are already jolly lucky to have a Council house in the first place! Bearing in mind the huge waiting lists.
The fact that those on the waiting lists will have to wait longer and longer as more and more properties are sold off and therefore removed from the pool of available Council housing makes it even more unfair..
Here are a few more points:
- Councils are unable to use the right to buy proceeds of sale to build new houses (I don’t know the financial details but I understand most if not all of the money goes to the Treasury)
- Reports have shown that 40% of right to buy homes end up in the hands of private landlords
- If these are let to tenants on benefit, then public money is going to enrich private landlords rather than going back to the Councils, plus
- The private rents will be higher than the rent would have been had the property still been a Council property
- Councils still have a duty to re-house families in ‘priority need’ but no longer have homes to put them in.
In view of all this, surely it is obvious that we should stop Council House sales NOW. Not extend it to Housing Associations.
Stopping council house sales is the ‘low hanging fruit’ contribution to the solution of the housing crisis. They have stopped it in Scotland. They are stopping it in Wales.
Only in England is it remaining and being extended. Right to buy seems to be a sacred cow which Tory orthodoxy considers an essential good. But it isn’t. Indeed it is arguable that removing the right to buy is an essential part of solving the housing crisis.
Action Section
While the Conservatives are in power this policy will probably only be changed if it is shown to be really, really unpopular.
At the moment we can only assume that Conservative MPs see Council house sales through rose-tinted spectacles showing grateful former Labour voters turning into Tories.
So probably the best thing to do is to make it clear to your MP (if Tory) that you really, really object to selling off Council House stock (and are even more opposed to the selling of Housing Association stock) and that if this practice is not stopped it will incline you to vote Labour.
There is also signing a petition. However, I have not been able to find any against Council sales per se – if you decide to start one let me know and I will link to it here.
RTB was shown to be an extremely popular policy. It was first proposed by Labour (in 1959), and they gave up on trying to reverse it in the mid-80s. Since we live in a democracy it was the right policy,
There is no national housing crisis. National policy changes to address local issues are silly, even when the locality is London. Unfortunately they are too common.
Whether the house is occupied by a council tenant, a home owner or a private tenant it still holds the same number of households. The type of ownership is neutral with regard to any shortage of housing,
Councils seemed to do a poor job of maintaining properties. Most local council stock was transferred to a HA and has been much better maintained since them. My parents’ house was on the edge of a council estate and the condition of the houses improved a lot after RTB.Very few are to let as many are of “non-traditional construction”. Anyway it seems a conflict of interest for councils to be responsible for checking the condition of properties they manage.
There is nothing wrong with private landlords owning former council homes. I own one myself
Council housing started after WW1 to deal with the shortage of housing caused by the war. With the security of tenancy that then applied it did benefit individual families, and could even be inherited.
I certainly will not vote Labour whilst it is led by Corbyn. Though my local Labour MP resigned from the shadow cabinet, so I do have some respect for him,
I think the discount offered for RTB should be reduced and I disagree with it being extended to HAs. I think councils should be allowed to pay for or subsidise new housing if there is a local shortage of a particular type of housing.
Peter I agree and disagree with several points you have made there:-
I was shocked when Tony Blair’s government did nothing to reverse the tide of RTB and as you say it was initially a labour idea but when you say ” Since we live in a democracy it was the right policy,”, that is a nonsense argument. A democracy doesnt justify everything. What about ‘Shoot to kill?”, Capital punishment? A decision taken by a democracy doenst automatically validate all arguments.
There is no national housing crisis. National policy changes to address local issues are silly, even when the locality is London. Unfortunately they are too common.- 100% wholeheartedly agree. The logic of a policy that applies to Kensington & Chelsea or Lambeth can be a complete irrelevance in Redcar or Morpeth. Britain may be geographically small in global terms but the diversity it is demographically diverse.
Whether the house is occupied by a council tenant, a home owner or a private tenant it still holds the same number of households. No its doesnt necessarily, when in London the bog issue is family homes converted into big, illegally overcrowded HMOs. I work on 2 different housing estates where hundreds of family homes have been converted not just without council knowledge or approval but also local residents, who dont realise that their estate is becoming one gigantic hostel.
Councils seemed to do a poor job of maintaining properties. – 100% agree but a lot of this is down to cuts and restrictions on what they can spend money on.
Most local council stock was transferred to a HA – Not true, many of these HAs were actually Arms Length Management Organisations (ALMOS) that are in reality management wings of local authorities.
There is nothing wrong with private landlords owning former council homes. I own one myself – Sorry Peter. You may well be a nice fella but being the owner of a former council home as a landlord doesnt mean that it is morally or economically right.
Democracy = the government should implement the will of the majority in some form. Even if the majority is wrong it is right for the government to implement its will. It may be a flawed system but I don’t know of any better one.
There was nothing shocking about Tony Blair not scrapping right to buy. The Labour party had dropped its opposition to the policy,. They did greatly reduce the discount for many areas.
You appear to be saying that rogue LLs are reducing homelessness by creating illegal HMOs, which of course they are. But there has to be a balance between quality of housing and quantity. Still your argument only applies to rogue landlords, not the honest majority. Of course honest LLs converting houses to legal HMOs also reduce homelessness. So if your aim is primarily to reduce homelessness then the PRS is the way to go, with rigorous enforcement of the law.
Councils have been poorly maintaining housing since the 60s, Blaming it on cuts does not make sense. Homeowners and landlords may sometimes maintain a property poorly but they have a personnal financial incentive to do it well, which councillors do not. HAs with a single purpose of providing housing are also better motivated.
When I wrote “most local council stock” I mean most of the stock of my local council. The group it was transferred to describes itself as a housing association, but it looks like it may be an ALMOS. It certainly appears to be doing a lot better job than the council used to. It is currently building a block of luxury appartments above shops in the centre of town which is something that has been needed for years.
My owning an ex-council house is not why there is nothing morally and economically wrong with doing so. The latter is true so I bought it. Economically – free markets are the most efficient way to distribute goods. Whilst the housing market is not entirely free it would be economically wrong to put unnecessary restrictions on who can buy such a house. Actually it wasn’t an entirely free transaction. The owner had died in his 90s and the house was sold to pay his care fees. So the money went to the council. It was advertised for 3 months and mine was the only offer. It needed modernisation so needed someone with thee cash to refurbish it to buy it. The day after it was ready the tenant moved it. I didn’t get a chance to look at it myself. She is a single mother with two children who wanted a house near her parents. She is still there 3.5 years later paying the same rent. She has what she wants – a nice home in the right location. I get an income (which I needed as I had lost my job the year before and at my age in my profession getting another was not likely. So we both benefitted. Nothing morally wrong there.
I think RTB is one of the great evils of govt policy, undermining their ability to fulfill our social obligations to those in need. My husband and I bought a privately owned former council property on a largely still council tenanted estate. It was our first home. Our neighbour, a council tenant, later bought his property via RTB and borrowed up big on the equity, he squandered every penny. The property was repossessed and he is now back where he started…what a joke!
In the areas of greatest need, where the property prices are highest is where the problem is worst. I think anyone in the know would agree that the issue with people fraudulently accessing RTB is rife. Many people are illegally subletting in order to maintain the address so they can later buy the property at a knock down price! Unfortunately councils do not have the budgets to effectively manage these tenancies, because if they did they would make regular inspections of their properties as private landlords are expected to do and they would quickly uncover illegal sublets saving themselves a fortune and freeing up many, many properties to families in need. Someone should really do a cost/benefit analysis of providing more staff to carry out these vital roles.
Interestingly this article was published in the Guardian today https://www.theguardian.com/society/2017/dec/08/right-to-buy-homes-owned-private-landlords which shows that a large percentage of Right to Buy properties end up in the hands of private landlords. In Milton Keynes apparently, it is 70%!
I don’t think its wrong of landlords to have bought these properties by the way (after all landlords do not make the laws), but I do think it is bad for society that these properties have gone out of public ownership (or ownership by a housing association etc).
The idea of right to buy was so ordinary people could own their home, not for them to sell it off at a profit to landlords who will then rent it out to benefit tenants – which will end up being a massive expense to the local authorities (and thus all of us who pay council tax). It’s madness.
It is certainly not madness, nor is it bad for society Far too many homes were controlled by civil servants rather than the people living in them. Giving people the freedom to do what they want with their homes was and is an entirely sensible idea. Yes some people will make mistakes with that freedom, but being free to make your own mistakes is the the essence of being an adult.
Having a safety net is good both for those who can’t look after themselves and to allow people to take risks, but having tthe state manage 32% of housing (1980) was just wrong. Of course most of that housing was not available to those in need. The tenants had secure tenancies which could be inherited.
Peter I agree with much of what you say in your various comments and I had initially written an additional section in my earlier comment about how I think the PRS is far better positioned to provide social housing at a great saving to councils (and far better managed) in the majority of areas (other than perhaps those with the highest property prices), but deleted it as I felt as though I was veering off the topic of RTB.
The greatest problem with RTB is not that it gives people freedom to make their own mistakes, rather that it interferes with market forces in a way that doesn’t help the majority at all. If my old neighbour had paid market value for the property then it’s no skin of my nose if he makes a pigs ear out of his life, but because he got it for a song he treated it like some kind of lottery win.
The enormous discounts of RTB, especially in high priced areas creates a lack of affordable housing for benefits tenants and creates a bottle neck of movement in these areas also as people are clinging to an area simply to meet the criteria to be eligible. These are the self same areas that need social housing the most.
From my point of view this adds to the scape-goating of landlords because they have what someone else wants, but can’t seem to get.
If benefits tenants had to function in the PRS in most areas it may eventually help chip away at the mind-set that many seem to have where when you leave school you put your name down for a council house and just wait until you get to the top of the list. It’s not their fault because they’ve been brought up in the system and surrounded by people who think this is normal and ordinary, but it isn’t right and it doesn’t help society, or those individuals.
I think RTB should 100% be ended in the areas where rented housing is unaffordable for housing benefits tenants and it should continue in areas where PRS housing is readily available at affordable prices, but discounts should be MUCH lower than they currently are; 35%+ for a house and 50%+ for a flat is just too generous! It’s not encouraging home ownership so much as inflating the queue for council properties. Those people receiving housing benefits and renting privately are effectively being hugely penalised because they won’t acquire the right to buy their flat at a 50% discount will they?