Housing Minister retreats on RTB sales?

The magazine Inside Housing reports that Housing Minister Gavin Barwell has said that the Right to Buy policy ‘is only politically justifiable’ if the government is delivering replacement homes. At the Communities and Local Government Select Committee Barwell said he would reassess the rules on receipts because future government projections suggest that they will not be able to replace the homes sold.

“I do want to look at the rules in relation to RTB receipts…because my own view is that RTB is a good thing but it’s only politically justifiable if I deliver a replacement.”

Barwell’s statement begs the question if housing stock sold is not being replaced then shouldn’t RTB sales be halted? This writer is in favour of RTB being ended. However, supporters of council housing should pick up on Barwell’s words and press their councils and their MPs to demand that if the Minister thinks RTB is unjustified unless sold homes are replaced, then councils should have the right to suspend sales if they cannot replace them.

“Extended RTB”

If the failure to provide ‘one for one’ replacement means that RTB is not “politically justifiable” then the question is posed how can the enforced sale of ‘higher value’ homes be justified? Under the proposed extension of RTB to housing associations the Housing & Planning Act makes it compulsory for councils to sell off ‘higher value’ homes¹ on the open market when they are vacant; when the tenant leaves or dies. The receipts will effectively be confiscated by the government and handed over to housing associations to compensate them for the difference between the receipts they get for the sale and the market value. Only if there is anything left would councils get what remains of receipts from the sale of their housing.

However, the government has stepped back on this policy, nervous that it will collapse because of insufficient receipts to compensate housing associations. It is proposing another regional trial. It now looks as if civil servants have computed how many homes will be lost under this legislation and told the Minister there is no way they can be replaced.

Barwell’s statement provides an opening for campaigners to kill off this policy. The contradictions of the government’s housing policy are piling up. Every pressure should be bought to bear to demand the abandonment of enforced sale of ‘higher value ‘ council stock because it can only mean the further decline of stock numbers which are now down to only 1.61 million in England.

Note on “Additional sales”

Barwell said that the government is currently delivering ‘one for one’ replacement, but this is simply untrue. The issue of ‘one for one’ replacement arose when the coalition government introduced its ‘enhanced RTB’; increased discounts and a reduction of the qualifying period from 5 to 3 years. Although the impression was given that ‘one for one’ replacement applied to all RTB sales, it was in fact a commitment to replace only those homes sold over and above the RTB estimates that were included in the council housing finance system, ‘self-financing’, when it was introduced in 2012. The base for that figure was RTB sales in 2011/12. Inside Housing explains that

“The government commitment has pledged to replace all “additional” homes sold as a result of its decision to increase discounts to £77,000 and 103,900 in London.”

Prior to the introduction of the ‘enhanced RTB’ programme there were 2,638 local authority homes sold in England in 2011/12. Since the increased discounts were introduced sales have risen significantly. The table below shows RTB sales in England and the number of “additional” sales which the government was supposed to ensure were replaced.

Year	RTB sales	“additional” sales
2012-13	5,944	3,306
2013-14	11,261	8,623
2014-15	12,304	9,666
2015-16	12,246	9,608
Total	40,755	31,203

How many homes have councils built to replace them? A mere 5,520 in England, short of ‘one for one’ replacement by a long distance. Moreover, in that time-scale more council homes were demolished than were built, 13,000. In those 4 years alone the number of council homes in England declined by 82,000.

So the government never committed to replacing all homes sold under RTB and has failed to ensure replacement of the “additional” homes sold. Despite the acute ‘social housing’ shortage government policy is responsible for a continued decline of the available stock.

Martin Wicks

March 3^rd 2017