The Government’s extension of the Right to Buy will inevitably raise concerns of further running down the social housing stock.
Unless we build at least as many homes as we sell, we’ll eventually run out of homes anyone is prepared to buy.
Decent Homes means the state wouldn’t quite end up being a slum landlord but it would be relegated to owning only the least desirable properties.
So Right to Buy has to be accompanied by a credible and delivered programme of new homes building.
Right to Buy could be an important part of transforming estates and creating mixed communities but this can only happen if the coalition is prepared to make some tough decisions.
A property bought under Right to Buy is lost to the pool of affordable, social housing. The buyer is (rightly) free to sell it on or rent it out on the private market.
But what if the buyer’s tenant is a low income household which relies on the state for Housing Benefit?
The taxpayer has already subsidised the purchase price and is now subsidising the buyer’s mortgage via the tenant’s HB award.
We’re potentially paying the original buyer not to live in a home we sold them for a knock-down price and, because it’s now being rented on the private sector, there’s a risk we’re paying more HB than if the property was still being rented at an affordable social sector rent.
Plus, the fact that we’re paying any HB at all for the property undermines the desire to create neighbourhoods of mixed affluence.
Should we be looking to the coalition to prohibit the paying of HB on any RTB property which is subsequently offered for rent?
romin sutherland says
November 19, 2011 at 5:10 pmHB doesn’t pay mortgages anyway. And I’m not sure how someone reliant upon social security can get a mortgage anyway. I’d be more worried about our diminishing social housing stock.
Martin Hoscik says
November 19, 2011 at 5:24 pmHi Romin
I think you miss the point, HB is claimable by tenants renting homes which have been sold under RTB. The person tenting the property then uses the rent (funded by the HB) to pay off their mortgage.
Mwmbwls says
November 21, 2011 at 3:07 pmFirst the primary conclusion to your article should in fact have dwelt on the need to replace housing stock sold on to tenants. Ringfencing and reinvesting of the proceeds of such sales should be mandatory that way capital gains in the value of the property should be captured. It is quite reasonable to share part of the capital gain with the tenants as a reward for good tenancy – this funds the discount. Discounts should therefore not exceed the capital gain made on any property.
Conflating the landlord’s and ternant interest is contrary to the public interest. The need for a tenant to apply for HB should be dependent on their circumstances not the purpose that the Landlord intends to use the funds for. Rental contracts do not routinely require tenants to continulally update landlord’s about their earnings and as long as the rent is paid it should be none of the landlord’s business.