Politics

The Wrongs of Right-to-Buy

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Haringey hit the (local) news recently for handing BACK £15m to the Government from the sale of council homes. Quite rightly people were outraged that in the midst of the most severe housing crisis this country has seen Haringey were giving back money that could be spent on building new homes. Last month I went to a fantastic talk on housing by Cllr. Alan Strickland that set out the challenges facing councils at the moment. I wish more people could have heard the talk for themselves as it was so clear and informative but, knowing that is unlikely to happen, I will try my best to outline some of his key points. I am by no means an expert and I am happy to be corrected on anything I may have got wrong….

So, when challenged by an angry member about this vast sum of money that the council had “refused” to spend, Cllr. Strickland explained that there were a number of restrictions on how Right To Buy money could be spent. These include:

  1. RTB money can only be used to fund 30% of any property development
  2. If RTB money is being used to fund a development the council has to contribute the remaining 70% and they are not allowed to use money from other schemes in conjunction with the RTB money.
  3. The money has to be spent in three years. Which sounds likes ages but it isn’t three years to get sale confirmed. That’s 3 years to get the land sold, surveys done and bricks laid.

So, it was with a heavy heart that the money was returned as Haringey desperately needs more social housing. The cut to benefits, the introduction of the bedroom tax and hugely inflated London rents have resulted in a 14% increase in homelessness in the last year; that includes 100,00 children that do not have a permanent address. But what does Right to Buy have to do with any of this?

When the Right-to-Buy scheme was first announced in the Conservative manifesto in May the promise was that for EVERY council house sold a new one would be built. As you can see from the figures below – that hasn’t happened.

Detailed borough-by-borough breakdown of Right-to-Buy replacements

Borough

Replacements

started

RTB

sales

Sales for each

replacement

Social housing waiting list

Barking and Dagenham

417

488

1

11,024

Barnet

3

229

76

1,045

Bexley

NA

NA

NA

3,481

Brent

0

168

zero replacement

5,102

Bromley

NA

NA

NA

3,126

Camden

21

195

9

22,409

City of London

0

23

zero replacement

476

Croydon

0

175

zero replacement

5,102

Ealing

0

274

zero replacement

10,676

Enfield

37

287

8

2,237

Greenwich

0

567

zero replacement

11,375

Hackney

70

203

3

7,926

Hammersmith and Fulham

0

130

zero replacement

433

Haringey

0

383

zero replacement

9,203

Harrow

0

81

zero replacement

687

Havering

6

212

35

2,271

Hillingdon

0

308

zero replacement

3,606

Hounslow

5

154

31

6,842

Islington

61

345

6

17,860

Kensington and Chelsea

13

54

4

2,677

Kingston upon Thames

0

77

zero replacement

6,436

Lambeth

0

258

zero replacement

15,264

Lewisham

14

220

16

8,294

Merton

NA

NA

NA

7,625

Newham

19

372

20

15,582

Redbridge

3

133

44

7,804

Richmond upon Thames

NA

NA

NA

4,008

Southwark

21

556

26

13,436

Sutton

0

163

zero replacement

1,496

Tower Hamlets

100

284

3

20,425

Waltham Forest

0

270

zero replacement

20,635

Wandsworth

25

251

10

2,788

Westminster

10

112.88

11

4,378

London total

825

6,973

8

11,024

So what happens to people those people that suddenly find themselves in desperate need of social housing that just no longer exists?

One solution is to approach private landlords and ask them to rent out their property to these tenants. In 2010 100 private rentals housed Haringey tenants on benefits, in stark contrast, last year only 22 private landlords were happy to do this. There are so many reasons why a landlord would decide to not rent out their property to a tenant on benefits and in the case of some buy-to-let mortgages there are specific terms that state the property cannot be used for social housing. The admin surrounding housing benefit can be slow and arduous – why go through the hassle or renting as social housing when you can quickly and efficiently earn a huge amount renting your property privately? So, quick recap: social housing being sold, not being rebuilt, private landlords turning away tenants on benefits. So now where do you go?

The answer at the moment seems to be “out of London.” Which is exactly what is happening. Families that have lived in London all their lives and rely on their community and network are given a train ticket to Peterborough/Luton/Basildon etc. This in turn puts pressure on those communities to quickly find houses and school places for these families. There is currently a legal battle brewing between Luton and the London Borough of Walthamstow over the number of families the Borough are relocating.

So what is the solution? We need to build a vast amount of social housing and affordable homes for first time buyers (and we need to discuss what that term “affordable” means.) Obviously this will take time so in the interim we need to offer long term, stable affordable rental contracts. There is no strong evidence that rent caps would solve the problem but it can’t be left completely deregulated as it is at the moment.

If the Government are going to going to continue with the Right-To-Buy scheme they will have to free up councils to spend the money it brings in. As Cllr. Strickland pointed out during his talk, whilst there is no single Conservative policy stating an aim to drive poor people out of London when you look at the policies as a “package”: cutting disability benefits, spare room tax, not replacing social housing and cutting tax credits they all point in that direction.

Housing crisis

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One thought on “The Wrongs of Right-to-Buy

  1. Also a vast number of RTB homes end up in the hands of private landlords too. This is the transfer of housing stock to the private sector on a grand scale and it just means that private landlords get rich from taxpayers money being paid to them in the form of housing benefit.

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