Controversial programme will force social landlords to sell property at major discounts
At tomorrow’s Queen’s Speech, David Cameron will make his party’s extended Right to Buy policy a central part of the new government’s programme.
The scheme will subsidise the purchase of houses for 1.3 million housing association tenants, and is highly controversial as it involves forcing independent non-profit social landlords to sell assets far below their market value.
The programme also requires housing associations to replace each home sold to tenants on a “one for one” basis, which will force associations to buy new properties for one particular region by selling homes in another when they become vacant.
The receipts from these sales are also expected to cover brownfield regeneration.
The extension to the scheme, originally one of Margaret Thatcher’s flagship policies, could cost the government as much as £11.6bn, according to analysts at the National Housing Federation (NHF).
The NHF calculates that despite the Right to Buy scheme being advertised as available to 1.3 million, the true figure for those eligible and able to afford to buy the council homes is closer to 221,000.
The question is, can the sale of council properties raise enough money to fund the scheme, replace existing housing stocks and cover brownfield regeneration?
With a worryingly small number of homes currently being built, is subsidising the sale of the current stock of council houses really the best method of boosting housing provision in the UK?