Conservatives claim that extending the so-called ‘Right to Buy’ policy to housing association tenants will give the possibility of home ownership to 1.3 million families.

But at what cost? And is this the right policy priority, given our housing crisis?

What isn’t explicit in the name of this policy (‘right to buy’) is that it involves selling off homes at a very large discount to their market value – over £100,000 per home.  This amounts to a huge give-away of public assets to the new owner-occupier of the homes in question – who are likely to be amongst the better-off housing association tenants and already benefitting from a secure affordable home.  The Institute of Fiscal Studies has estimated that the total cost of the policy is likely to be of the order of £11.6 billion over the next five years.  As Boris Johnson correctly warned on the 25th March, the policy “would involve massive subsidies.”  His scepticism of the policy has subsequently been revised, but he was of course spot on.

The government plans to raise the billions of pounds necessary to pay for this policy by forcing local councils to sell-off the most valuable third of their council homes as they become vacant. The proceeds of these forced sales will apparently also cover the cost of replacing the council home being sold off and also be used to create a £1 billion ‘Brownfield Regeneration Fund’.  These sums simply do not add up, and even if they did, wouldn’t it be better to spend the £11.6 billion on building more affordable homes for those that desperately need them, rather than giving it away to those already adequately housed?

Not surprisingly, concerns have been expressed by housing charities and most leading housing commentators that the policy will end up depleting the stock of social housing.

It was the introduction of ‘Right to buy’ by the Thatcher government of 1979 that effectively stopped council house building in the UK, as councils could no longer finance the building of new homes if they would be forced to give them away at a big discount as soon as tenants moved in and exercised their rights.  It is the legacy of this policy that has left us with a massive under-supply of new homes over the past 30 years.

Sadly the Coalition government reinvigorated the Right to Buy policy for council housing, but this time claimed that there would be a one-for-one replacement with new affordable homes. In fact the Institute for Fiscal Studies says that the actual replacement of council housing has in practice been closer to just one in ten.  There must be a risk that this new extension of the policy to housing association tenants will again lead to a collapse in new affordable homes as well as the loss of a significant proportion of the existing stock.

This is at a time when we need a massive supply of extra affordable homes. In London alone there are over 60,000 households living in emergency temporary accommodation.  More than 1 in 10 London households are living in overcrowded conditions.  In the capital, average house prices are now more than 14 times the median annual wage (up from 4 times in 1997) and rising.  At the same time, private rents are also rising rapidly and now on average account for 53% of gross earnings.

None of these problems will be addressed by extending the Right to Buy to housing association tenants.  In fact many of these problems that exist in London and around the country will simply deepen in their severity.

As Liberal Democrats we need to do more than simply oppose this terrible policy, we also need to spell out, and campaign for, alternative policies that address the real problems facing those in housing need.

Instead of spending billions extending Right to Buy we should instead invest public money in the only policy that makes sense – building more affordable homes.

Different policies might be needed in other parts of the UK, but to address London’s ever deepening housing crisis there are five steps that should be taken now:

1. Double the delivery of new affordable homes through increased City Hall investment and use of publicly owned brownfield land;
2. Control runaway housing inflation by increasing the rate of Capital Gains Tax applied to second homes and investment properties;
3. Toughen up laws to prevent landlords from evicting tenants who ask for repairs & introduce longer, fixed-term, family friendly tenancies;
4. Bring 20,000 long term empty homes back into use as family homes; and
5. Introduce a “rent to own” scheme to help first time buyers into home ownership.

Diminishing the stock of affordable homes owned by housing associations and local council properties is total foolishness.   An alternative strategy for tackling our housing crisis has never been more important.

* Cllr Stephen Knight is a member of the London Assembly and a councillor in Richmond.