Boris Johnson is considering reviving Margaret Thatcher’s Right to Buy scheme by giving people the chance to buy the properties they rent from housing associations at a reduced price.
The idea, designed to help the ‘annuitant generation’ and prove the government is still committed to its Tory principles amid unrest from some backbench MPs, is being hatched by officials from Political Unit No. 10, with reports that up to 2.5 million households could become eligible to buy their homes at a discount of up to 70%.
But housing experts warned the policy amounted to selling off affordable homes during the cost of living crisis and instead called for increased home building. Polly Neate, Shelter’s chief executive, criticized the “wacky idea” as “the opposite of what the country needs”.
Ministers are also considering whether to allow banks to consider taxpayers’ money received by those claiming housing benefit when applying for a mortgage.
To help boost housing stocks, the government is considering scrapping the rule that developers must build a set number of affordable homes in favor of having them paid into an infrastructure fund which councils can then use to finance their own projects.
Housing reforms were scrapped after the government backed down in the face of a huge backlash from Tory MPs over changes to planning rules.
The Daily Telegraph quoted a source as saying Johnson was “very keen” on rejuvenating Thatcher’s right to buy policy, with the roughly 2.5 million households living in housing association property becoming eligible to buy their home.
The right to buy became one of the rulings inherited from the Thatcher era and allowed council tenants to buy their properties at a reduced rate. Critics, however, have rounded on the policy, which they say will only worsen the shortage of affordable housing in the country.
Shelter said that in the last three months of 2021 almost 34,000 households in England have become homeless, including more than 8,000 families with children.
Neate said: ‘There couldn’t be a worse time to sell what’s left of our last truly affordable social homes. The cost of living crisis means more people are on the brink of homelessness than homeownership…
“The right to buy has already caused a huge hole in our social housing stock since less than 5% of the units sold have already been replaced. These half-baked plans have been tried before and they failed.
More than a million households are stuck on waiting lists for social housing in England according to the charity, and at a time of skyrocketing bills Neate said the government ‘should build more housing social, so we have more not less”.
Housing expert Henry Pryor suggested the Tories were trying to bribe voters with a taxpayer-subsidized sale of housing association stock. About half of homes previously bought under the right to buy are rented out for higher rents in the private sector, with thousands of rents subsidized by the taxpayer, he said.
There were long waiting lists for social housing because the government had failed to replace old homes sold under the right to purchase, he added. “It’s social gerrymandering, tempting people with a chance to earn a few pounds at the expense of the rest of us and more importantly those who really need affordable housing. »
In 2015, the idea of selling swathes of housing association properties was resurrected by David Cameron’s government. At the time, Johnson was Mayor of London and was lukewarm about politics.
He told the London assembly: “One of the problems … is that it would potentially be extremely costly for this body. The difference should be made up. Housing associations are private organizations, as we all know. This would involve massive subsidies. We would need funds to support this.
A housing association right to buy scheme was piloted in 2018 in the Midlands and the Tories’ latest election manifesto said they would consider further pilots, but no others were pursued.
Critics said many of the housing association’s decent properties had already been sold and the rest would not be a tempting purchase for current tenants. “They need new ideas,” complained a conservative source.
Given the cost of living crisis, it is also possible that social housing prices will remain too high for many struggling households.
The Department of Upgrading, Communities and Housing has been contacted for comment.