Ed Davey likens Tory housing sell-off to Mugabe's land reform | Politics | The Guardian
http://www.theguardian.com/politics/201 ... and-reform

Where I live is mostly council houses and nobody ever really moves, or if they do, it's only down the street. Even when someone dies it's often their family who take on the rent and continue to live there. A handful have bought the houses. The money the council makes from a sale is minimal, even with Ulster's laughable extortionate house prices, but also worth taking into account is that many of the homes are now 30 years old and will require all sorts of tinkering. So I really don't know what to think about it

It clearly suits the Tories down to the ground, but then few British governments have a great record on social housing.

It's right insofar as people should have a chance to remain in a property if they've lived there for an extended period of time. It's wrong insofar as there's no valid economic reason to subsidise the sale of those houses to those people. And it's VERY wrong insofar as consecutive governments have banned councils from using the funds selling those houses generates to build new houses.

There's nothing morally wrong with 'right to buy' as a principle. Just the way it was done was effectively gerrymandering on a national scale and it's left us with a significant shortage of social housing, which is leading to misery for thousands of people.

'Right to buy' should be (IMO) 'you have a legal opportunity to buy a social property once you've lived in it for an extended period (say over a decade) at a price of the average of the prices assessed by three different valuers, on condition you remain living in the property for a further decade. If you wish to move out of the property within that time (or you die within that time), the council has first refusal to buy the property back at the price you paid adjusted for RPI inflation, either to you or to your estate.'

That, of course, is nothing like the scheme we have, because the scheme we have is politically rather than socially motivated.

There's nothing wrong with it in principle, but the current shortage of housing is making it a problem.

The main problem is that people think they have to buy houses, offering people long term rentals would be much better.
Most right to buy properties are bought, lived in for the minimum number of years they have to under the scheme then sold on for full market rate, this leaves the council with one less property & potentially paying somebodies mortgage when they find out they can't afford the new property & go back to the council.
or (and this is even more annoying) they're turned in to rental properties and the owner cashes in whilst living somewhere else.

There's practically a whole estate near where we live where 4 bed houses were purchased under right to buy at a massive discount, then rented out to students at £600 a room per month.

Of course what it also means is we (as in the taxpayer) end up paying high 'market rate' rents to put social tenants up in private sector rented properties because there isn't enough social housing, when the properties in question are often former social housing which could have housed those same people at much less cost to the taxpayer if they hadn't been sold off under 'right to buy'.

'Right to buy' has often become an example of the bad form of capitalism - a way to continually syphon money away from the state to the individual, simply because that individual had some capital at some point in the past. It's a lop-sided arrangement which disadvantages the majority to service the minority.

Jon

Totally agree

If it's such a good idea it should extend to the private rental market.
The original scheme was an ideologically driven bribe by the Tories, nothing more. We're all now living with the consequences of a chronic lack of social housing.

And is the chronic lack of social housing just down to right-to-buy or because no new social housing has been built?

A better question is surely what effect has right to buy had on the building of social housing?
Councils built a lot of social housing but if the tenants can buy it for a big discount (anywhere up to 50% of the market value previously, and currently up to 77k, 103k in London) then how attractive is it for the council to continue to build housing if they can't guarantee to even get the replacement value back?

But of both I think. Right to buy has taken existing stock out of social housing, and the veto on building has meant that hasn't been addressed. Add in massive price inflation and a growing population, particularly in the south east, and bingo!, you have a housing crisis.

I don't think anybody really cares who builds more houses at this point, whether the private or public sector. But pretty much everyone agrees we need a lot more housing and a more affordable housing retail sector. Rebalancing the economy so all the jobs don't end up in the south east might help too.

There is also the slight issue that actually building enough houses to address the crisis would result in a decline in prices. Governments (of both stripes) don't really want to p!ss off that many voters.

That sort of depends on whether there is a bubble market doesn't it? If house prices are twice what they should be, and the council sells for half market rate, then the council is selling at the 'correct' price. If the council is allowed to spend the same money on building another house, it is receiving ample reward for that particular task, and so has sufficient motive to do it again.

Arguably, it would be quite a good way to level off a market if a council were empowered to sell off housing stock at 20% below the going rate whenever that would provide them with sufficient cash for replacement plus, say, another 20%. Any council with sufficient stock would thereby have price control over houses and rents they didn't actually own or administer, and would also receive compensation for using it (which would otherwise depress their property taxes).

As far as I can tell councils do not retain all the money of RTB sales. It looks like at least a quarter goes straight to the treasury - example here. More seems to go on repaying historic housing debt. The actual amount of the total receipt a council is allowed to retain and use for new house building seems to be 25%. There also seem to be rules about what councils can spend the rest of the money on as well.
Councils also need the land to build on and if they don't have any land held in reserve then they presumably have to pay the market rate for land to build more houses on.

Aside from anything else, it's not the council's job to use it's money to put a brake on a housing bubble. Why should the public purse be use to offset the risk of private investment? If council owned property is to be sold, it should be sold at the market price, whatever that may be.

The councils who sell should be obliged to replace each property with one of equal capacity (same number of bedrooms, basically), with any profit generated after that put into the council funds to use for other local spending. Maybe allow the central government to take a chunk of that profit - same rate as corporation tax say. After all, quite a lot of council funding comes from central government (much then than it was, mind). What's fair for corporations must also be fair for councils, right?

I wasn't promoting that as a plan, I don't typically support politically motivated market manipulation because they backfire far more often than they succeed. That said, it's not as silly an idea as rent controls, which is a notion that never quite dies. I see no reason why the state, using state owned resources to meddle in prices without loss would be worse than the state just telling everyone else what their [LIFTED] is worth, without having any skin in the game.

A council should be entitled to raise whatever money it sees fit to spend on housing by selling off other houses at any old price it wants as far as I'm concerned (without the treasury pickling their pockets). And what housing they choose to build in place of that would be better determined by need rather than quota, if only they could trusted not to gerrymander.

Right to buy isn't a great solution. But should a council have the right (or even a duty) to evict those who can afford to leave council property? That seems a little harsh too.

As regards the land thing. Councils aren't constrained by land on the whole, but they are subject to perverse incentives which mean they often get paid very well to deny planning permission on brown field sites and sell off a school playground instead. Sorting out those distortions would go a long way towards fixing this country's housing issues, and perhaps prevent a small amount of future obesity.