The announcement was made today by David Cameron that the Government plans to boost the right-to-buy scheme to a level where affordable housing is sold off as quickly as it is built.
This initiative, started in the Thatcher years was intended to allow tenants of affordable homes to buy their properties and enable them to enter the housing market. The theory was that by splitting up ghetto estates into homes of varying tenure that residents would aspire to improve their homes and their lives and everyone would win. By joining the housing market ladder they would be lifted out of poverty.
When Labour came to power they supported the initiative at first, but then realised that selling off affordable homes at a discount was costing the country more money that it was raising, as new stock was costing more to build than was ever going to be gained through the sale of old stock. Residents who bought their properties in some problem estates simply rented them out to people who couldn’t afford to buy and the same pattern of deprivation simply continued just with new residents who were transient and were even less interested in improving the quality of life on some of our poorest estates.
On top of these difficulties, the current mortgage market will mean that very few residents in social housing will be able to get a mortgage to buy their properties. The numbers of sales through this regime in recent years tells its own story, 8,410 in England in 2010-11, 7,300 in 2008-9, 19,360 in 2007-8, none close to the high point of 69,580 in 2003-4.
The average value of the sales in the same period has dropped from a low of £45k when the policy was first introduced to a high of £104 now.
Behind the scenes every housing professional knows that the right to buy scheme has been disastrous for regeneration. Every project aiming to improve the lives of residents on estates has run into problems because leaseholders and freeholders want their pound of flesh from any regeneration and cause endless delays and introduce high legal costs.
As preparations for the Green Deal get underway this policy will draw a groan from housing management across the country as it makes an already difficult job more so. The prospect of getting agreement from building tenants to works will be lessened , the more diverse the tenancies are in each street and in each apartment building.
This initiative may play well with the Tory heartland and may even suit the Lib Dem aspiration to a fairer society, but the policy needs to work to be worth implementing. The evidence of recent history is that it doesn’t, and the government would do well to learn the lesson and not recycle the mistakes of the past.