Writing a blog this week couldn’t be about anything other than the Tory manifesto proposals on right to buy.
As ever before an election, manifestos are designed to be slogan based policies to catch headlines and provoke a response. The Tories certainly did that, but I would argue that the important issue is to show what can be done to meet the need to build the right homes in the right places and to provide evidence on what can, or in this case will not work.
If the premise is to build more houses and/or increase owner occupation do the proposals do that?
Could local authorities fund more replacements through selling their most expensive stock?
The Policy Exchange estimated that between 15-19% of social houses in the North are above median value for the region. This represents total social housing, not just local authority properties, but it remains a useful yardstick particularly as the manifesto policy is not at all clear what happens where stock has been transferred.
And even if the resources from LAs could be pooled nationally they would go further in the North, but the most desperate issues of supply are in the South East.
Developing housing associations have 30 year business plans and lending based on carefully calculated, stress tested rental streams. Cuts to the rental income would mean cuts to development. Retained rental income might cover the landlord responsibilities to maintain and manage homes, dependent on the proportion of stock sold, but would be unlikely to support borrowing for development.
Increase owner occupation:
Figures from a London study show over a third of right to buy properties would move to the private rented sector and would then be likely to cost the public purse far more in housing benefit than they ever would as secure, well maintained social rented properties.
Would this help those saving for their first home or currently living in private rented accommodation?
The policy would not increase supply and would, over time, diminish social housing stock.
Those lucky enough to be living in a housing association property and able to afford to buy would change tenure and gain a huge windfall due to the discount as and when they choose to sell, but as fewer homes would be built by housing associations prices would rise, impacting on those renting and probably increasing housing benefits in the private rented sector.
So, in answer to my initial question, the proposals would neither increase supply nor help those wanting to own their own homes. And that is without looking at the legal position or complex costs of compensation.
Let’s hope this is political posturing and that the evidence will show any incoming government that this simply would not achieve mores homes.