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Simon Hughes is wrong on right to buy

August 7th, 2010 Posted in coalition by

Less than a week after criticising the Prime Minister for making up housing policy on the hoof without consulting coalition channels, Simon Hughes is campaigning for an option for Councils to suspend the Right to Buy scheme. This would be a bad idea.

Right to Buy, the facility for Council tenants to buy their homes, before it was a Conservative Policy was supported by the Liberal Party, whose 1950 manifesto states:

“Housing: The main plan is, first to get people decent living conditions and then to give them the chance to become owner-occupiers, even in Council houses and flats”

Simon’s motivation is to ensure more Council homes remain Council homes in order to maintain the social pool and reduce waiting lists.

But stopping the right to buy does not increase the housing stock, it just increases the barriers between the social and private sector, ensuring that it is harder for aspirational tenants to move on. The Liberal Democrats have campaigned for some time for there to be more links between RTB receipts and new build or regeneration.

Right to Buy also ensures mixed communities. Tenants sell on, young professionals and families move in. Ending the scheme would means needs-assessments were the only condition for tenancy. A recipe for concentrating social problems.

I think it strange that some self-defined social liberals campaign rigorously for mixing pupils in schools through lotteries and LEA selection, but think in housing communities are better segregated. Make your minds up.

Simon’s long-term vision is also questionable. Bermondsey already has one of the highest percentages of social housing in the country, the London Borough of Southwark is the UK’s largest landlord. That means it also has some of the highest demand for more.

But the conclusion of endlessly responding to that demand is to continually increase the percentage, concentrating social problems and poverty across entire areas not just estates. That in turn reduces money coming into an area, spent in the area, local employment and the tax base.

In that regard, as has been said previously, what Bermondsey needs most is mixed housing and business parks as part of a sustainable economy strategy. Diversity and opportunities not homogeneity and subsidies.

What Simon’s proposal would mean instead is ongoing polarisation. Aspirational Councils wouldn’t use the power, left-leaning Councils would see it as an opportunity to gerrymander wards. How Bermondsey got into such a mess in the first place.  

Happily that has been changing for 40 years, and not just along the river, usually through mixed public private approaches and community partnerships. Simon has often been a leading supporter of such schemes.

It would be sad then if he went into the twilight of his career abandonning what works for token populism as a reaction to concerns about the national political situation.

12 Responses to “Simon Hughes is wrong on right to buy”

  1. Jayu Says:

    But if Cameron’s floated idea of fixed term tenancies, and forcing tenants to downsize becomes policy then the right to buy would be dead. If you are in a position to buy your council house, then by definition you are no longer in need of social housing. So under Cameron’s plan the council would refuse your request to buy, but not only that, they would start proceedings to remove you from your home. So maybe when Hughes realises that this is an unintended consequence of Cameron’s policy idea, he may end up supporting it.


  2. PoliticalHackUK Says:

    Much coalition social policy seems to have the – hopefully – unintentional effect of ghettoising the poorest and least organised. Plans for limited tenancies will ensure that council housing is reserved for those most in need, reforms to housing benefit will push people away from their existing communities and social networks – where the right tell us that tenants are
    imprisoned – and even the education policy will create a lower tier of schools struggling along on LA funding without the enhanced funding.

    Polarisation will happen either way.


  3. Gentoo Says:

    @PoliticalhackUK

    “Plans for limited tenancies will ensure that council housing is reserved for those most in need”

    Social housing is a constrained resource so surely by any political philosophy its use needs to be optimised. You reach for the extreme end of the counter-argument.

    Since social housing is not private property – is overconsumption (under-occupancy) or succession in title justifiable? In the later case, would you abolish captial gains tax in order to permit childern to continue to live in private housing?

    “reforms to housing benefit will push people away from their existing communities and social networks”

    Luckily for me I am well past all of this however, I know (as compared to “have heard of”)
    dozens of young professionals renting several to a property in London Zone 1-2 for work reasons then looking to buy in Zone 6 or beyond for financial reasons.

    What’s so special about those on housing benefit?


  4. Philip Walker Says:

    One of the things I don’t understand about right to buy is how the funds have been administered. If I were setting it up, which admittedly I’m a bit young for, I’d have given councils at the least a very strong steer that the intention was for them to use the funds from selling each unit of social housing to build at least one new one. In effect, you upgrade the social housing stock by selling the old stock into the private market and getting new stock in new build estates.

    But the impression I get is that that isn’t how things have worked out. Am I right?


  5. SadButMadLad Says:

    Right to buy is wrong as a policy. It takes homes out of social housing. Right to buy is even more wrong when the homes are bought at a discount as it means less funds to replace the home taken out. And what happens to the people who want a social housing in the future.

    It’s nice for people to be able to own property, but it’s not always a plus. House prices go up as well as down.

    Either have full social housing – proper council housing, not some half private/public housing association, or none at all. And if you are going to sell social housing do not sell at a discount. Why should people on benefits (social housing tenants are most likely to be on benefits) be able to profit though the discount while people who work and save every penny struggle to pay for a home without any discount.


  6. Matt Says:

    The notion in counter arguments that right to buy takes a house out of ciculation has been shown to be wrong by various studies not least because people tend to stay in the homes quite a long time anyway. Right to buy was one of the best ideas any Govt came up with to help working class people. The problem was councils were not allowed to re-invest the money properly. That is the issue.


  7. tim leunig Says:

    Philip – most of the original stock had long mortgages on it. When the council sold under RTB they had to pay off the mortgage. Not an unreasonable request, but it did mean that there wasn’t as much money to build as their might have been


  8. Tim Carpenter Says:

    “right to buy” at market rates is one thing. At a discount? It is handing over equity to one group at the expense of another when those funding it have no choice in the matter.

    The policy does not so much allow people to step up, but more leapfrog over others. It is a distortion to the market which at best moves the problem and usually introduces more problems and distortions.


  9. Ed Joyce Says:

    @Matt
    @Phillip

    One of the most common arguments about Right to Buy is that for every house sold one new one should be built.

    I estimate that 400,000 properties in London were sold, where were these to be ‘rebuilt’ ? Almost all the people who make this statement don’t want to build on the Green Belt.

    Building 400,000 houses would have solved the problem – social housing or not. If land was made available they would have been built anyway.

    I personally would love to see more builing but lets think how that could be done. Everyone who makes this statement only thinks about this after they have this pointed out which is putting the cart before the horse.

    Ed Joyce


  10. tim leunig Says:

    The discount reflects the fact that tenants would otherwise get a subsidy in the form of lower rent in subsequent years. The discount was to make it fair on those who bought – it was akin to the net present value of the subsidy that they were giving up.


  11. Tim Carpenter Says:

    @tim leunig,

    then it is doubly bad – for who says they will continue to be enfitled to subsidy in the future and that they even were entitled if properly means tested at the point of purchase?

    You have offered up another reason not to allow it.


  12. letting agents in Bradford Says:

    I thing it’s RTB’s sole responsibility to construct the mortgage pay off when the sell out the council as you see all the famous and reputed stocks have long lasting mortgage. So it’s not a matter of surprise to check it out.