10 Oct 2015

Right to Buy - an update

David Orr, chief executive of the National Housing Federation, explains why the majority of the housing association sector – including GreenSquare – put forward a voluntary offer to the government on Right to Buy, which has since been accepted.

It rights so many of the wrongs in the original proposals. It gives us an opportunity to support a central manifesto pledge of a democratically-elected government, help many of our tenants onto the housing ladder, and actually boost our housing supply while protecting that crucial independence which allows associations to borrow billions on the private markets to build more homes.

 Here’s why we’re doing this:

 Reason 1: More homes

We have a housing crisis. We have been campaigning for years to get our politicians to engage with the seriousness of our housing shortage. And if we are to deliver one million new homes in the life of this parliament we need to get moving now. Under the terms of the offer housing associations will be fully compensated for the market value of the homes they sell. I can’t overstate how important this is. Proper compensation means they will be able to build at least one new home for every one sold – and the holy grail of 1:1 replacement finally has a realistic chance of being delivered. This would be much harder with a statutory Right to Buy of the 1980s model, where the receipts are split between the vendor and the government and, in the case of stock transfers, local authorities too.

Reason 2: Helping people on to the housing ladder

This government was elected under a central manifesto pledge to extend the Right to Buy. Why? Because people understand the dream of buying your own home. Our offer recognises that 86% of the population of our country aspire to home ownership. At present, more than half the country is priced out of the chance of buying a home. The Right to Buy gives thousands of people the chance to achieve that dream. As they move, social lettings will be made to the homes they leave behind. But our proposal does even more. It gives housing associations the opportunity to contribute to a huge increase in homes for shared ownership, helping an increasing number of people to meet the aspiration to own a home.

Reason 3: More homes to rent (and buy)

I have argued in the past that Right to Buy does nothing for the millions of people in the private rented sector. That remains frustrating and true. However, our offer to the government will see an increase in the number of new homes built, which has the potential to ease pressure in all parts of the market, including the rental market.  Part of the broader housing association offer is a wide range of tenures in new build homes, including high quality homes for market rent. 

Reason 4: Protecting the power of independence

I have also argued with the government’s proposals on matter of principle. I made the case that it is wrong for a government to impose an obligation on private social enterprises to sell assets when the board considers it to be wrong to do so. The decision of the board must take precedence over the wishes of government. To do otherwise would lead to housing associations losing their independence – the very thing that has enabled them to borrow billions on the private market to invest in housebuilding. Our voluntary offer makes a clear offer to tenants without ceding independence and without allowing government to sit where boards should be, making the long term decisions which are in the best interests of the organisation and its customers. 

Housing associations are a huge force for good.  They are the most effective public/private partnerships in the history of the nation and for every £1 of government investment, they contribute £6 of their own funding. All this was put at risk by the original Right to Buy proposals. Our offer to Government and to the nation is designed to remove that risk and ensure that housing associations can continue to make a compelling contribution to the defining challenge of our times – ending the housing crisis.

 

Read the full version of this article here.

Read the NHF response to the Government’s acceptance of this proposal here.

 

 

 

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