The new plan, headed by former Shadow Home Secretary David Davis MP and well known Labour backbencher Frank Field, suggests that the Government’s moves to increase home ownership have not been drastic enough. In a report created for the Institute for Public Policy Research think tank, they suggest a further development of the ‘Right-to-Buy’ (RTB) plan, a policy dating back to the Thatcher era, to include all social housing tenants.
At present, the only housing tenants with the right to buy are those who lived in their homes when they were transferred from local authority stock, but the MPs iterate that extending the right-to-buy to all housing association tenants would help them to move from renting into owner occupation “rather than receive a subsidy for life”. By doing so, the Government could provide around 1 million social housing tenants with the possibility of jumping onto the property ladder.
There would also be other benefits to the housing industry and the wider economy. Under the plan, all money raised from the sale of housing association properties would be channelled directly back into building new social housing. With an estimated 2 million families living in inadequate accommodation, many strongly believe this housing is sorely needed.
David Davis is reported to have stated:
“Rather than housing associations collecting relatively small sums of rent, a right-to-buy scheme would allow them to raise lump sums they can use to build more social housing. As long as the total proceeds of social home sales is reinvested in the housing stock, the right to buy is a win-win for everyone: tenants become homeowners, the building industry gains a long-term building programme and unemployed building workers get jobs.”
In the foreword to the report the authors state:
“Preventing social tenants from owning their home ties up billions of pounds of public funds that could be better used to help people onto the housing ladder.
“Reinvigorating and extending the right to buy would not only increase homeownership: by using all the funds raised to build new homes, the policy would lift the most vulnerable households in Britain off waiting lists, out of temporary accommodation and into a place they can call home.”
The proposals come whilst the Government consults on separate changes to the RTB scheme, which would extend the maximum discount to £50,000. The consultation has met resistance from local councils who claim that the discounts will jeopardise their ability to provide a new home for every social housing unit sold, bearing in mind their borrowing is capped.
To read our blog on the subject, click here.