Rich pickings in the social housing sector

An Extension of Right-to-Buy under the Housing and Planning Act 2016

The Housing and Planning Bill received royal assent on 12th May 2016 and is now law despite fierce opposition to many parts of the bill.

One of the key changes introduced under the Housing and Planning Act 2016 is the extension of the Right-to-Buy to housing associations.

Under the Act housing associations now have a voluntary right to buy scheme thereby opening up the right to buy to thousands of housing association tenants.

This comes with a target of replacement of the Right-to-Buy homes on a one-for-one basis by the forced sale of high value local authority properties and use of the proceeds to fund the building of replacement homes.

There has been huge criticism of this scheme. The Local Government Association says the scheme will result in a decrease in housing stock by at least 80,000 homes, the majority of these being sold under the Right to Buy Scheme. The complexities of the law mean that there will be inevitable delays of many years in local authorities replacing these homes. Couple with this the proposed continued housing budget cuts of up to £2.2bn by 2020, the likelihood of these replacement home materialising gets slimmer and slimmer.

The Act attempts to deal with the reduction in social housing by providing for ‘Starter Homes’. The government has promised to build 200,000 starter homes by 2020, which would be available at 80% of the market value.

In London, where the cost of buying a home is astronomical, even 80% is well beyond the reach of many people and particularly those that will be most impacted by the reduction in social housing.

The number of people in temporary accommodation is estimated to be around 68,000. There are thousands more in hostels, homeless shelters, sofa surfing and physically street homeless. For these people, home ownership is not an option but their chances of having any kind of permanent home seem to be becoming equally unlikely.

The combination of short term accommodation, usually of a poor standard, accompanied by high rents create a cycle of homelessness that is incredibly difficult to escape from. This is extremely disruptive, particularly to families with children. Their education is frequently interrupted by having to move schools every year or two, leading to inevitable underachievement and no opportunity to make close and long-lasting relationships with friends and neighbours. The constant upheaval and lack of security create a sense of instability which will impact their whole lives.

Communities’ secretary Greg Clark MP has stated “Anybody who works hard and aspires to own their own home should have the opportunity to realise their dream”. But should this be at the expense of those that are the most vulnerable in society? Should the right of some to own a home overtake the right of others to have any home at all?