Margaret Thatcher’s belief in a ‘property-owning democracy’ paved the way for the introduction of Right to Buy in 1980, and the UK has been a nation obsessed with the idea of homeownership ever since.
Boris Johnson, keen to shift public focus away from ‘partygate’ scandal ahead of this week’s local elections, is understood to have told officials to draw up the plans to make it easier for people to buy their own home.
David Cameron, the former Tory prime minister, first announced the proposals in 2015, claiming that enabling tenants to purchase their social homes at a discount would create a new generation of homeowners – and no doubt prove popular with key voters.
Johnson is now considering proposals to extend Right to Buy and allow housing association tenants to buy their properties at a discounted price, which in turn would create fresh housing stock for estate and letting agents in the future.
The plan would follow the same principles as Margaret Thatcher’s Right to Buy, which permitted council house tenants to purchase their homes with discounts of up to 70%.
Last year, Johnson said, “young people shouldn’t feel excluded from the chance of owning their own home”. This came after his government pledged to further Right to Buy pilots in his Conservative election manifesto, which have not yet been implemented.
Polly Neate, chief executive of Shelter, is unsurprisingly among those opposed to Right to Buy, in light of the existing housing shortage and lengthy social housing waiting lists in England.
“The hare-brained idea of extending Right to Buy to housing associations is the opposite of what the country needs,” she said. “There could not be a worse time to sell off what remains of our last truly affordable social homes.”
David Alexander, the chief executive officer of DJ Alexander Scotland, accepts that the policy would prove to be a “vote winner” for Johnson, but he warns that if it is introduced in the same way that it was in the 1980’s, then the key issues which have dominated the housing market for the last two decades will simply be exacerbated by the move.
He commented: “Interestingly, it was the sale of council housing in the 1980’s that led directly to the substantial growth of the private rented sector. The sale of social housing only exacerbated the need for more housing as demand continued to exceed supply. This policy will only work if the funds gained from social housing sales are reinvested in more social housing rather than simply absorbed into other government spending.
“But there is little doubt that Boris Johnson has touched a nerve with this idea. Home ownership undoubtedly scratches an itch, a desire among the electorate to be homeowners and the discount to make it more affordable to a wider population. But caution is required as selling social housing needs to be matched with the building of more social housing supply. At the same time support for the private rented sector is also required as there are many who don’t want to buy for a variety of reasons. For those workers from the EU and elsewhere, for professionals moving around to further their career, and for the retired who might wish to sample a different lifestyle then the private rented sector remains a key option and is an essential part of the housing mix.”
He continued: “The re-introduction of Right to buy is a clear indication that property remains an integral part of political policy. However, it should be just one option among a range of options that meet the widely differing needs of people in the housing market. As ever with all changes in policy there will be consequences and mitigating against the unforeseen results of major shifts in options need to be factored into any change. The result will only be positive if it is matched by an increase in the size of the housing market to match growing need. Anything else will simply shift the demand to another time and another part of the market.”
“. Social “. Housing is owned by. ‘. PRIVATE. ‘. companies. Not state -. owned. within the control of. Govt to. part-gift to tenants.
What govt are proposing is. Sequestration of private property. Not. Legal or. possible. !
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It’s laughable that any governing party believes it has the time, domain knowledge or resources to deliver any grand scheme for solving the housing crisis. Housing the nation needs to balance supply with conflicted demand so it has to be removed from the 5 year, short term, system of tribal politics where property is used to influence voting patterns.
Low interest rate economic policy will defeat ANY scheme to provide aspirational home owners with a home of their own a point that’s been proved since 2005. Making money cheap to borrow mean more people can borrow more- that increases competition to buy and ultimately the person who can pay the most wins the contest- property prices rise.
When we were having the discussions on EAT (2008/9)with the HPC crew (Japan Dave, Sibley’s B’stad Child etc) they would mock 5 & 7% income yields and would ignore the 7% compound average growth in property prices and were convinced prices would crash even further. They dismissed the advice to “buy now while you can”. They should have listened; property will do what property does.
Mr. Johnson can propose what he likes but even if every home the country is capable of building in a year was sold to a first time buyer he will buy less than 250,000 votes, but there will be a corresponding 2.25m aspiration owners who have the will and means to buy their dream but who WILL be seen off by someone else.
Housing needs to be a apolitical department in government that does not change every 5 years but which has a proper influence over ‘colour politics’ economic strategy. Until there is every Housing project will be like a Laurence Llewelyn-Bowen home makeover project done by enthusiastic amateurs rather than qualified trades.
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A “housing dictator” as you describe, is a bad idea. The “problem” you are trying to solve is already actually caused by too much Government already.
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Don’t use emotive negatives to disparage considered solution; a Director of Housing who has considered and balanced the needs of all stakeholders is no different to CEO of a corporation.
The problems are caused by inconsistency and a lack of long term planning. A strong example is allowing short lets in areas where long term homes are required without any reference to a local plan. It should be required that properties removed from the housing stock need planning permission. That might limit 2nd home ownership and weekend party pads but the needs of the #local community would have to be considered
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a CEO or owner of any small company is different because they are “invested” meaning that they suffer from losses if they make a bad decision. Your Dictator faces no such restraints. This is very dangerous as it’s not realistic that one person or department could centrally plan the housing market very well.
Very few Dictators turn out to be nice once they become immune to economic and political feedback.
There is nothing intentionally emotive about the word “Dictator”, other than that history has shown the idea to be flawed. It’s just a way of saying a decision maker who is immune to the effects of the decisions they make. That’s very different to any CEO who has to please customers in order to please shareholders. a CEO without shareholders, without the need to make a profit and without competition, can do a lot of harm, as they will eventually be mistaken about an idea that they think is good and no one can stop them rolling it out.
I have great respect for you Mr May, but this idea is a dud.
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CEO’s make wrong decision quite often but the more experienced they are the less errors they make. They arm themselves with fact and complimentary domain knowledge and experience that makes whatever process more efficient sustainable and profitable.
Directing is with correct succession planning is very different from dictating policy and decisions
it is perfectly possible have a workable housing policy but it needs more time to work through and more experience than the current system of constantly changing housing ministers.
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It seems we might actually agree that housing minsters do a bad job. So that’s something.
Where we differ, is that you seem to think that housing minsters could become successful if only they were immune from the ramifications of their failed ideas by making them impossible to vote out.
Personally I think it’s bad enough that decisions are made by politicians who face no financial consequences for their bad ideas, but to remove all the political consequences too. You would need to find an angel. Given that you think we need a government at all, you must know that men are not angels.
If you find a suitably virtuous angel for this powerful new position, let us know. Otherwise let us assume that this position will be taken up by someone whom you dislike and distrust.
Personally I don’t think we need a housing minister at all. The worst thing about them is that they seems to insist on doing something, which always seems to have unforeseen consequences and backfires, resulting in a new housing minister almost every year. Given that they always seem to make a bad situation worse, the best advice I can give to any future minister is to just do nothing.
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“Housing needs to be a apolitical department in government that does not change every 5 years” that sentence ought to be clear enough that I think the director of housing should not be an MP working on behalf of the elected governing party.
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The Tories have really lost the plot. What people desperately want now is a roof above their heads. No point having the right to buy if you can’t find a place to live in the first place. We have to build many more houses at affordable rents WITHOUT the right to buy. Most of these people (but not all I know, before someone writes in and talks about serial council house tenants with Jags in their drives in the old days) will save up to buy a home for themselves and most will aspire to this. The lack of a safety net for low income earners in this country is appalling.
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I can’t actually believe they are this far out of touch!
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Really? Have you been living abroad and isolated from the news? Green taxes/initiative; abolishing S21; heat pumps; EPC for rentals must be a C. Need I go on?
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Nothing wrong with RTB. People forget that MT sold off a rather big maintenance bill that was looming and is forgotten in all the political rhetoric. Council Houses were in a dreadful condition or soon to become a liability and was going to cost the tax payer £m’s.
What is needed, is to replace the stock they sell off and no government has ever got their head around that … because of the cost to the tax payer.
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The only ‘ Investing ‘ that Councils have been doing ( and especially since the lifting of the borrowing cap ) has been in Commercial property, where they rightly perceive the greater financial gain.
Even L.A’s don’t act ‘ altruistically ‘ but for the budget’s bottom line.
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There is something seriously wrong when I find myself agreeing with Shelter of all people! The right to buy is a pure scam against taxpayers. The ONLY way to make it work is for the right to buy at 75% minimum of market price and for those funds to be paid in full to a home building pot.
The seer stupidity of this government is staggering.
Trying to word this article in a favourable light for agents is idiotic, we care more about than just “what can we make out of it” (you confuse us is Bankers PIE).
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