Swindon Tenants Campaign Group media release April 20th 2015

The Conservative election pledge to introduce ‘right to buy’ for Housing Association homes and to force Councils to sell ‘high value’ homes to pay towards the cost of it underlines the threat to the future of ‘social housing’ should the Tories manage to hang onto government.

It’s ironic that they are proposing to force Housing Associations, which are essentially private businesses (even if they are registered charities) to sell their homes. Imagine the furore in the media if another political party were proposing to force private owners who rent properties to sell them to their tenants. It would be denounced as socialism or class war. Even if the HA’s are given compensation (its not clear how much they will get) they will lose the revenue stream of rent lost by the sale of properties. Given that HA’s borrow money from commercial sources the loss of stock threatens their borrowing because it is based on an assessment of stock numbers, the value of stock and income from rents. If the compensation is less than the rental stream then the value of the stock will fall.

To add to the damage the Tories are proposing to force Councils to sell ‘high value’ homes in order to fund the compensation for HA’s; to help cover the difference between the sale price of an HA home and the market value. Why should Council’s be forced to sell their properties to fund a give-away of the homes of other organisations? This means that two ‘social homes’ will be lost for each HA home sold.

Although there is little detail in the Tory manifesto it appears that the money from the sale of a Council home will have to be spread three ways: to pay for a new Council home to replace the one sold, to pay for a HA home sold and to go towards a fund of £1 billion which will miraculously produce an extra 400,000 homes on brownfield sites. Do the maths and that’s £2,500 per home!

Even an article in the Tory backing Daily Telegraph described this policy as “economically illiterate and morally wrong”. As the BBC presenter Reverend Richard Coles said, “it should be called the right to steal”. And now the Observer has uncovered a letter from Housing Minister Kris Hopkins explaining why they could not support extension of ‘right to buy’ to HA’s…from 2013 (See appendix)

Swindon Tenants Campaign Group Secretary, Martin Wicks said:

“It’s difficult to conceive of this as anything other than a cynical attempt to buy votes. Vote for us and we’ll give you your HA home on the cheap, subsidised by selling off Council homes!

This is nothing short of theft of socially owned property. It will make the housing crisis worse. It will also drive up the housing benefit bill since a fall in ‘social housing’ numbers will push more and more people into private rented accommodation with its much higher rents and higher Housing Benefit payments.

Under the current government’s ‘right to buy’ scheme only around one in seven homes are being replaced by new ones. One for one replacement for this latest policy is even less likely that it has been previously.

Talk of promoting “a home-owning democracy” shows their contempt for people who don’t own a home. Isn’t the point of democracy supposed to be that every citizen is equal before the law no matter how much or how little wealth they own?

This policy should be opposed and rejected at the ballot box since it will worsen the housing crisis. We need more ‘social housing’ not less. ‘Right to buy’ has been one of the main reasons for the shortage of housing supply and the crisis of affordability both in the rented sector and home ownership. Coalition government housing policy has been disastrous. They have yet to achieve the level of ‘net additional homes’ built under the previous government at the worst point of the housing crash. Extending ‘right to buy’ to HA’s will add  to the disaster.”

For further comment ring Martin Wicks on 07786394593

Appendix

Letter from Housing Minister to Lib Dem MP Tessa Munt in 2013.

“Unlike local authorities, housing associations are independent, not for profit voluntary bodies and if they are obliged to consistently sell off their stock at less than market value they might find it difficult to borrow which could impact adversely on their repair and maintenance programmes and and affect the future provision of affordable housing.

The government does not consider that it would be reasonable to require housing associations to sell these properties at a discount. Any increase to the discount available under the Right to Acquire would only be possible through upfront central government subsidy, potentially incurring a high liability for the public purse.”

 

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