Assuming you remember the 1980s, what defined the decade for you? The music? The
fashion? The miners’ strike? If you’re a Conservative MP, chances are, it’s none of the above.
No, for many in British politics, the defining moment of the decade was Margaret Thatcher’s
Right to Buy policy. So much so, that there have been multiple attempts to revive it in one form
or another. Who remembers Michael Howard’s manifesto commitment in 2005? Or David
Cameron’s pitch for his 2015 election bid? Or Robert Jenrick in 2019?
So it comes as no surprise that Boris Johnson has become the latest Conservative politician to
hitch his wagon to this particular star. It was announced in early May that the Prime Minister is
considering reviving the scheme to allow housing association tenants to purchase the properties
they rent at a discounted price.
Under the proposed scheme, 2.5 million households would be eligible for discounts of up to
70% on their rental properties. But will it happen this time? Is it a good idea? And what would it
mean for conveyancers?
Will It Happen?
As we’ve already covered, this isn’t the first time the scheme has arisen from the dead. So
what’s different this time?
Well, it’s no secret that Boris Johnson is in desperate need of a vote-winning policy in the wake
of partygate and the ongoing cost of living crisis. Likewise, the Tory party could do with some
good old fashioned conservative policies to burnish its credentials with an unhappy electorate.
These factors alone make it an attractive option for both Johnson and the party.
However, given the timing of the announcement, it’s entirely possible that this is little more than
a political ‘dead cat’ to distract from other issues. Time will tell.
Is It a Good Idea?
Laying all that to one side for a moment, say this was to happen, would it be a good thing?
Let’s take a look at the good bits first. First of all, as we mentioned, this scheme would mean as
many as 2.5 million homes entering the market over its duration (although the real figure will be
far smaller than that). This would obviously be a real shot in the arm for the housing market.
It would also mean many people who are currently shut out of the housing market could gain a
foothold (much like the original scheme). Although low on details (quelle surprise) the
Government’s proposal did suggest that housing benefit could be used by would-be purchasers
to help secure a mortgage. That detail, at least, is laudable.
Now, we have to deal with the bad. Top of the list is how eye-wateringly expensive the scheme
would be, with some estimates putting the cost at £14bn over 10 years.
In addition, the new scheme suffers from many of the same problems as the original. The 1980s
version proved that it’s virtually impossible to replace housing stock one-for-one. Private
developers have little incentive to build social housing and local authorities (who were entrusted
with replacing it the first time around) whose resources are stretched and are legally required to
spend their budgets elsewhere.
And, so we end up with an even greater deficit of social housing for the neediest in our
communities. It’s less than ideal when the waiting list for local authority provided social housing
already stands at 1.16 million households.
Very little appears to have been proposed for how these problems will be countered or how the
scheme will ensure we aren’t in the same (or a worse) position in twenty years’ time.
Lastly, the scheme claims to tackle generation rent. Unfortunately, this strategy has a glaring
error. Although social housing still makes up a sizeable portion of the housing sector (around
18%) it isn’t how the majority of renters, particularly the younger people the phrase generation
rent was coined for, live.
The private rental market generally hovers around 20% of all households occupied, closer to
30% in London. That’s a huge swathe of potential homeowners and, if we’re being cynical,
voters for whom this scheme does nothing.
What would it mean for conveyancers?
Now we’ve tackled the benefits and drawbacks, what would the revival of the scheme mean for
In the short term, it would potentially lead to a spike in the number of new houses coming onto
the market. Of course, more work is generally a good thing for conveyancers, even more so if
it’s stimulating the lower end of the market and adding new homeowners to the ladder.
However, this will be little more than a short term blip if the problems of the earlier right to buy
scheme aren’t tackled. Or, to put it another way, the result will only be positive if it is matched by
an increase in the size of the housing market to match the ever-growing need.
Anything other than this just risks shifting demand to another part of the market and the
shortage continuing ad infinitum.