We have a Conservative government, but some of us have spotted that its policies do not always follow Conservative principles. Wider homeownership should be a core part of the Conservative agenda. Of course, it was during Margaret Thatcher’s premiership with the right to buy for council tenants. But the cause was shared by her predecessors – notably Anthony Eden, who set out the aim of a ‘property-owning democracy’ as an alternative to Labour’s vision of municipal socialism.
David Cameron tried to continue this tradition with a proposed ‘right to buy’ for housing association tenants. But his progress was hampered during the Coalition government due to vehement opposition from the Lib Dems. The 2015 Conservative manifesto promised:
‘We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes. We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.’
But soon after Theresa May became Prime Minister and this mission was abandoned. However, with Boris Johnson at the helm, it is reported that it is to be revived. The 2019 manifesto only made a modest reference (‘We will evaluate new pilot areas’). But we now hear it is to be a priority.
To suggest this is an existing policy is a misunderstanding. It had been allowed to fizzle out. As Robert Colvile explained on Twitter:
‘A deal was reached with housing associations to offer a ‘voluntary Right to Buy’ – the Government would compensate them for the loss of any properties sold, and they could offer tenants an alternative if they didn’t want to sell that particular property. The pilot scheme for this has now happened – but the May Government (which was awful on housebuilding/homeownership) basically long-grassed both the extension and the sale of high-value flats to pay for it.’
So, the news that it is again to be a genuine ambition is very welcome. But the details are important. For it to have the sort of impact of the Thatcher era right to buy the discounts offered on the market price – both for housing association tenants and council tenants – would need to be very substantial. Under the existing scheme for council tenants, the maximum is £116,200 in London or £87,200 across the rest of England. But average property prices in London are over £700,000. In England generally, it’s over £300,000. There is great variation, of course. But where I live in Fulham an extra council flat with one bedroom would typically sell for around £350,000.
Therefore the discounts need to be much higher. It should still be possible for replacement homes to be built if councils developed surplus land – for example, sites currently occupied with empty garages. They could help ensure the figures add up by including some market housing in the mix. The proposal from the 2015 manifesto to require the sale of high value social housing when it comes vacant should also be part of the financial package. It does not make much sense to have a housing association property worth millions of pounds on a grand square in Kensington or Belgravia. It is absurd asset management for such a situation to continue.
Even if the discounts were doubled or tripled the price would still be unaffordable for many. So the offer should also include ‘a right to shared ownership’. It could offer a modest stake – say 5% – for those who agree to take on responsibility for minor repairs.
The objections to the right to buy have been muddled or hypocritical. Plenty of socialists on Twitter, who are themselves fortunate enough to be homeowners, were quick to sneer at the idea 2.5 million housing association tenants should have the same chance.
Some said that stock sold would be ‘lost’. First of all this suggests that the homes would disappear. That because they were privately owned they were in some way of no benefit. Secondly, it ignored the point that if flexibility and financial rigour is applied, considerable new building by social housing landlords would be viable.
Some housing associations object that they are independent charities and so should not be given instructions by the Government. This is disingenuous. That might have been their origins but increasingly they have been absorbed as part of the state with the various subsidies handed over to them and obligations imposed on them in return. Often councils have transferred their entire stock over to a housing association – without it making much practical difference, except that new tenants lost the right to buy.
Then we have the argument that this policy won’t help millions of others struggling to get on the housing ladder as they are renting privately or stuck at home with their parents years after reaching adulthood. It is quite true that, for them, bold reform of the planning system is needed. A very significant increase in supply is required for house prices to stop rising and start falling. So we should do that too. A huge sale of surplus state land (not just local authorities by Quangos and central Government departments as well) could make a considerable contribution.
Broadly speaking, what we need is a coalition for homeownership, not a descent into envy. Many homeowners recognise there is a housing shortage that needs to be addressed by new building – which does not need to be ugly. Some might even welcome a fall in prices so that they could afford move to somewhere bigger and have more children. Or their offspring might be grown-ups who wanted to buy – something their parents would wish to see them achieve. Or they might simply have a moral sense that others should have the opportunity they did.
Some demand that the increase in supply should just be in London as that is where it is ‘needed’. It certainly is needed in the capital, but in the rest of the country too. Those on average incomes in the north and the Midlands also struggle to get a mortgage that would buy anything much.
What is needed is a real housing market. That would mean the state retreating in its ownership and regulation, which currently constrains supply and makes prices artificially and absurdly high. Those in all tenures, and from all parts of the country, should rally to that cause in a spirit of solidarity. It can be achieved if our movement is united.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.
