Conservative plan to extend Right To Buy to housing associations would lead to more debt and fewer affordable homes, the IFS says

The respected economic research institute says the Coalition has a 'less-than-impressive' record on replacing homes

Jon Stone
Friday 24 April 2015 11:46
An array of To Let and For Sale signs protrude from houses in the Selly Oak area of Birmingham on October 14, 2014 in Birmingham, United Kingdom
An array of To Let and For Sale signs protrude from houses in the Selly Oak area of Birmingham on October 14, 2014 in Birmingham, United Kingdom

The Conservatives’ plan to extend Right To Buy to housing associations would damage Britain’s public finances and deplete its social housing stock, the Institute for Fiscal Studies has said.

The respected economic research organisation, which is regularly cited as authoritative by the main political parties, said the “significant giveaway” would “worsen the UK’s underlying public finance position”.

The institute also said the Tories’ proposal to sell council properties to fund the move would force people on low incomes out of town centres and increasingly divide communities into rich and poor areas.

“Sales of expensive [local authority] properties would reduce the availability of social housing in the most expensive areas, thereby creating clearer divisions between areas where richer and poorer households are located,” a summary of a research note issued by the IFS said.

The institute said that the policy might potentially stimulate the building of social housing, albeit in less expensive areas that people on low incomes would be relegated to.

However, the IFS also notes that the Coalition has not made good on previous commitments to replace sold-off council housing and that social housing would probably become harder for people to get social housing because of the policy.

“There are considerable uncertainties surrounding the revenues that can be raised from sales of expensive properties, the costs of Right to Buy discounts and the cost of replacing sold properties. These reflect both genuine difficulties in predicting the effect of the policies and a lack of detail in the Conservative Party’s announcement,” the note said.

“Given this uncertainty, and the coalition’s less-than-impressive record in delivering replacement social housing under the existing Right to Buy, there is a risk that these policies will lead to a further depletion of the social housing stock – something the proposal explicitly seeks to avoid.”

The Right to Buy for council houses introduced by Margaret Thatcher’s government in 1980 and gave tenants the right to purchase their homes at substantial discounts.

Since 1980, almost 1.9 million council properties have been sold through Right to Buy in England and the total social housing stock has fallen by 26% since the first full year the policy came into effect.

The Tories proposed in their manifesto that half a million social housing tenants should be given access to the Right To Buy, to end what they describe as an “unfairness”.

“We are the party of working people, offering you security at every stage of your life,” David Cameron said at the policy’s launch.

Housing association bosses have threatened to take legal action if the policy were to come into effect.

You can read the IFS's briefing note in full HERE.

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