Right to Buy: Council house residents to be ‘given’ their homes? Is this some kind of joke?

Of all the daft ideas I've heard in a career in housing, this is the daftest

People are unable to downsize due to thousands of one and two-bedroom council houses getting sold off (Getty Images)

If you are an avid reader of the Daily Telegraph or have seen this morning’s Times you will be aware that there is a new round of speculation that some of our politicians are interested in extending the Right to Buy (RTB) to housing associations.

Those of you with long memories will recall that there was a serious attempt to do this in the 1980s which failed because of the combined opposition of the sector and the House of Lords. If there is a serious proposal to legislate again, it will fail again. And here’s why:

We have a housing crisis. It has many different components but at the heart of it is the reality that we have not built nearly enough of the right homes in the right place at the right price for a generation or more. All the efforts of housing associations, local authorities and others are geared towards ending this housing crisis by building new homes and regenerating existing homes where that is the best solution. The Right to Buy makes that more difficult.

For those housing associations that already have the preserved RTB, the discounts of up to £102,500 make the Government’s commitment to 1-1 replacement a hollow joke. Here’s just one example. Phoenix Community Housing in London recently sold a home worth £210,000 on the open market for just over half of that. From the proceeds, some went back to the Treasury, some to the local authority leaving a receipt of just £27,000. Have you tried building a new home for £27,000?

And of course the huge majority of housing associations are charitable. Charitable rules say that you can’t normally dispose of any assets you own for less than their full value, as all your assets must be used to meet your charitable objectives. This is, of course, exactly as it should be. And while owner occupation may be desirable, it is not a charitable objective. Does anyone really want to have a battle over a proposed requirement that private, independent, charitable organisations should hand over some of their assets to individuals when what we should really be doing is concentrating on ending the housing crisis? No? I thought not.

But now, coming into sight from right field, is a genuinely stupid idea. In an online article in the Telegraph a couple of weeks ago, an apparently serious proposal was made that any tenant of a social home who had been in work for a year should be given their home. That’s right, just given it. I checked that it wasn’t April Fool’s day and read on. Apparently, the lucky recipient would have an obligation to give 35 per cent of the proceeds of any future sale to ‘the Government’ who would use it to build new homes. Lucky tenant. And even luckier government. A bit of a problem, though, for those housing associations who collectively have borrowed well in excess of £60 billion to build homes – borrowing which depends on having an income stream (rent) to repay it and which has all kinds of covenants built into it.

My first instinct was to ignore this idea as being just too bonkers to have any traction. But it is being repeated in the Spectator and elsewhere, so before it gets any credibility at all, let me just state for the record. Of all the daft ideas I’ve heard in a career in housing, this is the daftest.

We’ll be told, of course, that opposing Right To Buy is to oppose aspiration. This is rubbish. Over the last decade, housing associations have sold 82,000 shared ownership properties and continue to develop new homes across all tenures so that we can meet the aspirations of as many people as possible to have a decent, affordable home. We have to keep our eye on the prize.

This article first appeared on the National Housing Federation website