Margaret Thatcher’s belief in a ‘property-owning democracy’ paved the way for the introduction of Right to Buy in 1980, and the UK has been a nation obsessed with the idea of homeownership ever since.
Boris Johnson, keen to shift public focus away from ‘partygate’ scandal ahead of this week’s local elections, is understood to have told officials to draw up the plans to make it easier for people to buy their own home.
David Cameron, the former Tory prime minister, first announced the proposals in 2015, claiming that enabling tenants to purchase their social homes at a discount would create a new generation of homeowners – and no doubt prove popular with key voters.
Johnson is now considering proposals to extend Right to Buy and allow housing association tenants to buy their properties at a discounted price, which in turn would create fresh housing stock for estate and letting agents in the future.
The plan would follow the same principles as Margaret Thatcher’s Right to Buy, which permitted council house tenants to purchase their homes with discounts of up to 70%.
Last year, Johnson said, “young people shouldn’t feel excluded from the chance of owning their own home”. This came after his government pledged to further Right to Buy pilots in his Conservative election manifesto, which have not yet been implemented.
Polly Neate, chief executive of Shelter, is unsurprisingly among those opposed to Right to Buy, in light of the existing housing shortage and lengthy social housing waiting lists in England.
“The hare-brained idea of extending Right to Buy to housing associations is the opposite of what the country needs,” she said. “There could not be a worse time to sell off what remains of our last truly affordable social homes.”
David Alexander, the chief executive officer of DJ Alexander Scotland, accepts that the policy would prove to be a “vote winner” for Johnson, but he warns that if it is introduced in the same way that it was in the 1980’s, then the key issues which have dominated the housing market for the last two decades will simply be exacerbated by the move.
He commented: “Interestingly, it was the sale of council housing in the 1980’s that led directly to the substantial growth of the private rented sector. The sale of social housing only exacerbated the need for more housing as demand continued to exceed supply. This policy will only work if the funds gained from social housing sales are reinvested in more social housing rather than simply absorbed into other government spending.
“But there is little doubt that Boris Johnson has touched a nerve with this idea. Home ownership undoubtedly scratches an itch, a desire among the electorate to be homeowners and the discount to make it more affordable to a wider population. But caution is required as selling social housing needs to be matched with the building of more social housing supply. At the same time support for the private rented sector is also required as there are many who don’t want to buy for a variety of reasons. For those workers from the EU and elsewhere, for professionals moving around to further their career, and for the retired who might wish to sample a different lifestyle then the private rented sector remains a key option and is an essential part of the housing mix.”
He continued: “The re-introduction of Right to buy is a clear indication that property remains an integral part of political policy. However, it should be just one option among a range of options that meet the widely differing needs of people in the housing market. As ever with all changes in policy there will be consequences and mitigating against the unforeseen results of major shifts in options need to be factored into any change. The result will only be positive if it is matched by an increase in the size of the housing market to match growing need. Anything else will simply shift the demand to another time and another part of the market.”
SOURCE: Property Industry Eye | MAY 3, 2022 | MARC DA SILVA
Estate Agents
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