Right to Build
Last month the government relaunched a scheme which has been more controversial than most schemes to emenate out of Whitehall over the years: Right to Buy. Finding its roots way back in the distant past (well, the 80s), this scheme encourages council tenants to take their first steps onto the home ownership ladder through providing a discount should they want to purchase their council owned home.
Apparently, over 2m social homes have been bought by their tenants since the schemes first incarnation, although in recent years this number has tailed off dramatically (only 4000 purchases of this type happened in 2011). Whilst primarily this is down to the tough economic times, it is also down to the fact that the value of the discount fell so heavily. In London for example, the discount fell from 53% way down to 10%, which is a real pain when property prices have increased from £16,493 in the year of the Silver Jubilee to £354,300 during this year’s royal celebrations.
I have very mixed feelings on this issue, and quite a split between my personal and my professional minds. On the one hand Right to Buy is a way for council tenants to grasp on by their fingernails to the property ladder, something which over the years has become tougher to do. With many seeing home ownership as an aspiration, any way of helping can only be seen as a good thing.
However, speaking less selfishly I’m pretty concerned at the current state of affairs. Part of this stems from the scheme itself, but mostly on its impact on the quantity and quality of housing stock remaining and being built to make up for purchased property’s loss.
The scheme itself I have not too much problem with, as long as homes are being replaced on at least a like for like basis. Back in the day this concept took a while to embed with planting trees, but over time we’ve evolved to the point that firms take it as a mark of honour to offset their environmental impact by planting trees left right and centre.
At the recent Grand Designs Live event , TV’s Kevin McCloud showed a map of britain and the amount of new housing that was planned over the next few years. It was pitifully small, and he was very frank about the fact that whilst this map showed nowhere near as much as is actually needed, it in fact also showed a probable overestimation of the amount which will actually end up being built.
In 2009/10 there were 115,000 new houses built in England, which doesn’t nicely tally up with the suggestion that the number of households will grow by 232,000 per year. Without a huge upsurge in the number of homes built, we are looking at not just a housing debt, but an ongoing housing deficit.
Another part of my concerns is the fact that these houses are not always in the places where they are most needed either. Newham council recently came under scathing attacks for asking housing associations outside of the commuter belt whether they might be willing to take some of tehir local residents on board. The wider media pounced on this when they were turned down rather publically, but since then the issue hasn’t just gone away. In inner city boroughs across the country there is a chronic housing shortage, and an even more acute affordable housing shortage.
On this very blog we ourselves have in the past said that targets are not always used appropriately, but at least until recently local government was forced to build a set number of homes to satisfy central targets. Whilst these targets were rarely met, at least they were something to aim at; these days things are a lot more flexible.
Under the current regulations, the only stipulation for councils is that for every home bought by the tenants, a new home should be built somewhere else. My understanding is that there is no limit as to where it gets built – a house sold in Kensington could be replaced by one in Northampton – nor any corolation between the size of these two properties. Even if a five bedroom detatched home is taken out of the system, all that is required is that at least a one bedroom flat replaces it.
Councils have up to three years to spend the money they make from sales too, which is up on the two years they originally would have had. If they choose not to spend it locally they can simply add it to a central pot which will be spent with an eye on the national situation, thus handing the buck on to someone else to carry.
As someone who is struggling to get on the housing market thanks to needing a deposit of approximately £44,000 (plus stamp duty and fees) to have any chance of getting a home suitable for my family, any way of getting housing stock into the market can from a personal point of view be seen as good. That I am unable to get onto any housing list and have an ice cube in hell’s chance of actually be placed in council housing makes it a little less useful, but for others it is a way for them to own their own home should they want to.
However, unless we tighten up our commitment to actually build massively more housing than is currently proposed we will be getting nowhere. This is not a small problem, and not one which is going to go away if we just ignore it for long enough.
Central government claims that they are passing the power and responsibility to deliver new housing down to local government, “freeing up local areas to provide the homes needed for their communities and enabling the market to work more eiciently and responsively.”
Let’s not pass the buck any more and instead grasp the baton and run forward with it. Every Englishman’s home is his castle; let’s not pull up the drawbridge and leave the unwashed masses to fend for themselves against the economic barbarians.
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