Swindon Tenants Campaign Group welcomes Labour’s commitment to suspend Right to Buy, announced by Shadow Housing Minister Teresa Pearce. STCG has long argued for scrapping RTB as Scotland and Wales have now done. Whilst Labour’s commitment falls short of that we welcome Teresa Pearce’s statement. She is certainly right that given the housing shortage there is no justification for selling Council homes. So adopting a policy of suspending it is a step in the right direction. She told the conference that RTB “could only make sense in a time of surplus, in a time of shortage it makes no sense at all”.
Since the ‘enhanced RTB’ was introduced in 2012, with increased discounts, over 45,000 Council homes in England have been sold off. During that time local authorities have managed only 5,731 starts on site and acquisitions (i.e. replacements by building or buying). Under the coalition government the number of council homes in England declined by 143,000. Demolition of 16,570 Council homes was more than double the number of new ones built under the coalition.
In Swindon, in the four years since the introduction of the ‘enhanced RTB’, 216 Council homes have been sold. Swindon Council is not replacing these. It has a programme of building 104 homes but when you take account of the demolition of Sussex Square the number falls to 70 additional homes. Hence the stock is declining year on year.
The commitment by Teresa Pearce has already been denounced by Housing Minister Gavin Barwell. Such a policy is said to be opposed to “aspiration”. If people want to aspire to owning a home fine. Yet people in social housing are in a better position than those in the private rented sector, both in terms of rent level and security. In subsidising RTB the government is hitting at the aspiration of people who live at home with their parents or in the increasingly expensive private rental sector to have a secure and affordable home to rent. RTB has been one of the key factors in the housing crisis. Too often “aspiration” has meant personal interest at the expense of other people. A decline in the number of available Council homes means that people on the waiting list will be on there longer.
Many of the homes sold end up being bought by buy to let landlords. The higher rent in the private sector means central government paying out more in housing benefit than for Council homes.
The increase in RTB sales also has a negative impact on existing Council housing. Local Authority Housing Revenue Accounts receive no subsidy. Their only income is from the rent and service charges which the tenants pay. An ongoing decline in the number of homes as a result of RTB means the loss of rental income available for maintenance of homes and renewal of key components. So as the stock shrinks local authorities have less money for management and maintenance of the remaining stock.
STCG Secretary Martin Wicks said:
“Right to But may have benefited individual households but it has been a social disaster. It is one of the major causes of the housing crisis, of the shortage of genuinely affordable homes for rent. It has helped to create a housing situation in which more and more people are priced out of home ownership (see note below) and forced into the expensive and insecure private rental sector. We believe that RTB should be scrapped as it has been in Scotland and Wales. However, suspension of its implementation would be a step in the right direction. We also welcome the commitment to a mass Council house building programme. Such a programme would be likely to lead to a fall in house prices as the number of people chasing after homes to buy or to rent privately would fall.”
The gulf between earnings and house prices continues to grow. In Swindon in 2015 the lowest quartile house prices were 6.66 times the lowest quartile earnings, not far short of the pre-crash high of 7.14 . Even the price of a median house was 6.13 times median earnings in 2015, just short of the pre-crash high of 6.17 times. (DCLG Live Tables)
Media Release September 29th 2016