Following the Scottish decision in July to scrap the ‘Right to Buy’(RTB) program from 1 st August, Wales are set to follow their Caledonian cousins in the next 12 months. The policy which was introduced by Margaret Thatcher’s Conservative government in 1980 has spent most of its existence steeped in controversy. The Labour Party has stated that the 138,000 council and housing association homes sold to tenants since its inception represent the removal of around 45% of the social housing stock from circulation. While others have trumpeted the move as a victory for truly affordable housing, and a move away from the costly private rental sector where some 40% of RTB properties end up.
Approval of the decision has not been universal; some commentators have viewed the move as a chill on social mobility which condemns council tenants to a lifetime of social renting. Others have questioned whether local authorities will be able to build fresh housing stock on the scale required to service those who would have formerly benefited from RTB. Which side of the divide you sit is likely to depend on your politics, but what is clear is that the Welsh Assembly’s decision, when taken with SNP’s decision in the summer, has the potential to shake up the way the UK goes about the supply of housing stock for first-time buyers.
So how is it going to work in Wales?
According to Carl Sergeant Cabinet Secretary for Communities and Children; the scaling back of RTB is running concurrently with fresh plans to build more social housing and an increase in saleable stock. Government investment of an additional £290 million in Wales’ ‘help to buy’(HTB) shared equity loan scheme proposes to make some 6,000 additional houses available to first-time buyers by 2021.
It is hoped that further investment in HTB, alongside a commitment to build social housing will provide a ‘decent place to live’ for all; whether first time buyers or society’s most needy. At the same time the prohibition of sub-letting help to buy properties and the end of RTB; should keep social housing and stock targeted at first time buyers in circulation, rather than in the hands of private landlords.
Are we likely to see something similar in England?
In short, it’s too early to say. There has been pressure in sections of the media and a damning analysis of RTB by the Local Government Association (LGA); which revealed in August that the replacement of RTB stock dropped 27% in 2015-16 from the equivalent period in the previous year. The LGA’s analysis showed that in 2015-16 for the 12,246 council homes sold under RTB, just 2,055 replacements were started by councils. These figures also represent part of the reduction in social housing from 31% to 17% of total housing stock since the scheme’s inception in 1980.
To this backdrop, the LGA has warned that continuing RTB risks further stagnation in affordable housing, increased pressure on the council home waiting list (which already numbers 1.4 million people) and even an increase in homelessness.
Despite this pressure, the current government has so far shown little interest in ending RTB. In fact, the scheme did appear to be slowing towards a natural demise before its relaunch in 2012, with an offer to quadruple discounts for London council tenants. In an August statement The Department for Communities and Local Government (DCLG), simply reiterated its commitment to invest in affordable homes. Promising to step in and build homes for local authorities who fail to begin building replacements within the 3-year deadline from sale, by which they are supposed to abide.
One has to consider the difference in ideology between the Welsh and Scottish governments and England. On the one hand, Wales & Scotland share broadly left-of- centre governments (Labour/Plaid Cymru & the SNP respectively) and the likely commitment to social housing that brings. On the other England is governed by an emboldened and ideologically determined conservative government committed to large-scale investment in housing stock. Lest we forget, RTB was a flagship tory policy during the 1980’s after all.
Where a Teresa May government stands on the subject is likely to depend on how far the ‘one nation conservatism' envelope is pushed. Something which at this time is unclear, but a policy switch seems unlikely given the current popularity of the conservative administration in recent polls.
Perhaps there is some future in the scheme announced by London's very own Barking and Dagenham Council in June. The scheme allows council tenants to purchase a share of their property, leaving the council with a minimum 30% stake and first refusal should the tenant look to sell on the open market. The aim being that the tenant has a route onto the housing ladder and the council and option to replenish the social housing stock.
Either way, it would appear that RTB in its current guise is going nowhere fast.