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Right to buy – why there needs to be a rethink.

by Ian Shires on 15 November, 2024

The new government is considering a rethink on the Right to But (RTB) as part of its strategy to help resolve the housing crisis. This in my view is a step in the right direction.

But more needs to be done, RTB is just one element in a complex issue. It requires a comprehensive housing strategy which covers all the bases if we as a nation Continuing to sell off council-built homes more cheaply than it costs to build new ones just doesn’t cut the mustard. Neither does allowing developers build new homes which are not carbon neutral, fit for purpose in a world struggling with the challenges of climate change.

Back in the 1960’s upwards of 33% of people lived either in a council house or flat. Today the figure has more than halved at 16%. The reasons for this fall in numbers is twofold, RTB and insufficient replacement social homes being built.

Right to Buy was introduced by the Thatcher Government in their 1980 Housing Act. Since then, over 2 million council-built homes have been sold to their tenants at significantly discounted prices.

Originally it was thought that RTB money could be used by councils to build replacements. This however was not the case. Only 50% of funds from RTB funds could be used for this purpose.

This put pressure on the Housing Revenue Accounts of many, if not all, councils (legally all monies to do with council housing has to be separate from councils budgets) resulting in a number of councils giving their tenants options to move to other social landlords i.e. housing associations or the council’s own arms – length companies. Walsall council tenants opted to for the former, which is when Walsall Housing Group (WHG) was established.

But I digress. Since the introduction of RTB back in the early 1980’s there has been a net loss of social homes almost every year due to insufficient social homes being built to replace those being sold off. The fact that the cost of building new homes has increased year on year just makes matters worse.

To complicate matters, house prices have been soaring putting home ownership out of reach for many. With waiting lists for social housing reaching an all-time high (In Walsall the figure stands at 13,728), many have been forced into the private rented sector.

Private sector landlords have also come under pressure with rising mortgage costs under the previous government. This has seen an increase in Section 21 Notices (no fault evictions) in order to increase rents beyond what current tenants can afford to pay which in turn increases the risk of homelessness.

As a result of the housing crisis inherited from the previous government, Labour’s Angela Rayner the Deputy Prime Minister and Secretary of State for Housing is considering imposing restrictions so that those moving into newly built council houses will not be able to buy them in the future.

As mentioned earlier RTB is but one element in this complex issue. Council’s need to be given the where with all to build fit for purpose energy efficient homes in quantities which haven’t been seen since after the second world war. Homes for sale need to be aimed at first time buyers not, as we see so often, for the luxury end of the market. House building needs to step into the 21st Century, move away from the slow, laborious traditional building methods and gear up to proven factory produced timber – framed and modular construction methods if we are to get anyway near the number of new homes required.

One thing is for certain, things will not change overnight. Fourteen years of austerity has left its mark and the so – called quick fixes that have gone on since 2015 have just kicked the problem further down the road.

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