Social Housing Weekly - 10 September 2024

Right to Buy: a legacy revisited

Once again, the Right to Buy policy finds itself back in the headlines, prompting Peter and me to engage in yet another spirited debate on housing policy. Peter sees Right to Buy as a pathway for individuals to escape state reliance and secure their families' future, albeit one in need of reform, and he remains sceptical of the impact that Labour's expected reforms will have.

Undoubtedly, the purchase of a council home can be transformative. My Nan bought hers and cherished that home until her final days. It was her little piece of the community she had called home for decades. I find it hard to imagine her anywhere else but in that cozy two-up-two-down where we frequently visited. She kept it immaculate and would serve us truly dreadful egg sandwiches and weak tea as we sat on her squashy, comfortable two-seater sofa with our feet up. Ownership gave her a sense of security, for which I am grateful.

Her death led me to reflect on that house. Inherited by her daughters, it was eventually sold, the proceeds benefiting my aunts, something Nan would have loved to be able to do for them. But wouldn't it have been even better if that cozy two-bedroom home, which had sustained my grandmother and four of her children through their childhoods and well into her old age, could have been refurbished and offered to someone desperately in need of social housing?

An acquaintance who works in planning for an outer London borough once mentioned that for every new social home they manage to get through the planning system, three more are lost to Right to Buy. While I can't verify the accuracy of this claim, it's alarming if true.

Earlier this year, news broke that seven of the Stirling Award-winning social homes in Norfolk were already subject to Right to Buy applications, just five years after their construction. These homes, stunning, sustainable, and exactly what social housing should be, will now serve one family instead of generations of families in need.

So, I don't dispute that Right to Buy has transformed lives. But I remain unconvinced that it is just or equitable to improve the lives of some while burdening future generations. There has undeniably been a decline in social housing stock since its introduction, something Labour is hoping to address with a combination of these reforms and an acceleration in house-building, both private and public sector.

While I might advocate for reforms to go further - perhaps so far as scrapping Right to Buy altogether, I don't doubt that discouraging purchases by reducing discounts and tightening eligibility will at least help to stem the tide of council homes being 'flipped' in the private sector.

Still, it isn't enough. If we want to encourage council-led building, we must re-evaluate this policy - and all housing policy - with fresh eyes, considering the needs of future families just as we do those in immediate need.  If nothing else, I personally would love to hear more about that 'build build build' agenda and how the Government plans to make that happen at a time when council simply don't have the money for a massive investment in new homes.

Harriet Shone

LCA Director

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Wrong to buy?

By Peter Lord

Examining Labour's proposed Right to Buy reforms 

With recent reports that the Government is to launch a review of Right to Buy ‘within weeks’, the Social Housing Weekly team has taken a look at the 44 year old policy and is asking whether Labour's reforms will improve the fairness and effectiveness of the scheme.

Of course, the concept of Right to Buy goes back much further than Thatcher. Political nerds will know that contained in Labour's 1959 manifesto was the principle of a similar scheme for council tenants to buy their homes, although specifics about eligibility and discounts were not included. Less well-known is that the ability of council tenants to purchase their homes goes back to the Housing Act 1936. Once introduced in the 1980s, the Right to Buy became a defining feature of Thatcherism and the criticisms came in thick and fast from opponents on the left, over the depletion of council housing stock. In the first decade of the policy, over a million homes were sold to council tenants, having a notably bigger impact in the south and east than in inner London or the north.

Although the Labour Party dropped its official opposition to the scheme in 1985, it reduced the discount when it came to power in 1997 (with the Cameron government increasing it again in 2012), and looks set to do the same thing again in this Parliament, alongside restrictions on eligibility such as the length of time living in a property, and scrapping the policy entirely for new council homes. But do these reforms do anything to address criticisms of the Thatcher-era policy? Moreover, do they in fact water down the benefit to lower-income social tenants looking to move onto the property ladder?

The principal objection to the scheme is of course that it depletes the housing stock. The Government's proposals to reduce the discount will logically decrease uptake by making the Right to Buy option less affordable to many, but with the discounts reduced, the policy will be of less help to precisely those whom it could help most. Meanwhile, it would not seem to do anything to prevent the purchase of former social homes as an asset. 

Other reforms seem more logical, such as tightening eligibility criteria. Restrictions on the length of tenure required should help to ensure the policy benefits those it was originally aimed at: secure social housing tenants. As for exempting new council homes from the scheme, this feels like the obvious reform. Keeping the homes in local authority or housing association ownership until they have earned their keep feels like something of a no-brainer.

Of course, any measure that succeeds in increasing take-up of the policy will, ipso facto, exacerbate the social housing stock depletion and, vice versa, reforms that reduce the sell-off of social housing stock will similarly restrict those households taking advantage of the policy.

So, is it right to buy? Well, surely increasing the number of homeowners is a good thing, and decreasing the supply of social homes is a bad thing... Restricting the sell-off of housing stock at the expense of those who may have needed the highest possible discount feels like it may be picking the wrong target.

Housing in the headlines

Grenfell justice delayed?

The Grenfell Tower Inquiry Phase Two report, published last Wednesday, concluded that the 72 deaths that occurred were ‘all avoidable’ and highlighted widespread failures from national government, the construction industry, cladding manufacturers, the London Fire Brigade and the Royal Borough of Kensington and Chelsea. At the same time, Angela Rayner has said that investigations by the Met Police into individuals and companies named in the  report ‘have to come as quickly as possible,’ stating that ‘justice delayed is justice denied.’

However, there has been further criticism of the report for its failure to issue recommendations for the social housing sector. The Inquiry has been criticised by former Chair of the Grenfell Tower Leaseholder Association for not including any new recommendations for the sector in its final report. Shah Ahmed has urged the Inquiry to include recommendations for stronger powers to be granted to tenant and residents' associations. Housing campaigner at charity Disability Rights UK, Mikey Erhardt, said the report ‘failed’ to make recommendations to improve relationships between tenants and social landlords.

Renters' reform, the sequel

The Government is expected to introduce its newly renamed Renters’ Rights Bill to the House of Commons this week, including measures for immediately banning Section 21 ‘no fault’ evictions, protections against rental bidding wars, and extending Awaab’s Law to the private rented sector by requiring landlords to respond to urgent repairs within a fixed timetable. The Bill will not include rent control measures but is expected to include preventions against unreasonable upfront payments and empowering tenants to challenge ‘excessive’ rent increases.

Government showdown: housing targets vs building safety

The Financial Times reports that the Government’s policy agenda for increasing housebuilding to deliver 1.5m new homes by 2029 could be a ‘brewing conflict’ with its dedication to improving construction safety regulations following the Grenfell Tower Inquiry final report’s findings. New regulations, including the accelerated remediation of dangerous cladding, could have an ‘adverse time and cost impact’ on the Government’s building ambitions.

Local authorities call for council tax cap to be scrapped

The Local Government Association has urged the Chancellor to remove the current 5% yearly cap on council tax rises to allow local authorities to decide how local services are funded. Currently, council tax rises of more than 4.99% require a local referendum to be approved, which the LGA has said should be scrapped as councils already have a ‘mandate’ through local elections. The LGA has also requested councils be granted powers to scrap all council tax discounts to support its income.

Let's get political

Critics slam "miserable" government

The Sunday Times reports on the Prime Minister's warning of a ‘painful’ October Budget with tax rises widely expected. The Government has been criticised for promoting a ‘miserable’ state of public policy, made more controversial through the Chancellor’s decision to cut winter fuel allowances for pensioners not in receipt of benefits, which she has said is part of her mission to ‘restore economic stability’. Leader of the House of Commons, Lucy Powell, has said the Government is ‘full of energy, full of ideas’ and promised a ‘packed legislative agenda’ for the autumn.

Wealthy to flee Britain over Labour's economic plans, say private equity firms

Financial advisers have warned of an ‘exodus’ of wealthy individuals and entrepreneurs in expectation of the Chancellor’s widely expected increase in capital gains tax and inheritance tax at the October Budget. Private equity executives have said the Prime Minister’s warning of a ‘painful Budget’ reaffirms decisions to leave the UK, alongside Labour’s pledges to scrap non-dom tax exemption. The Economic Confidence Index of senior business leaders from the Institute of Directors has also dropped 19 points in response to a ‘newsflow’ on fiscal and employment policy.