Is it time Right to Buy was stopped

[blurty]

I tend to vote Tory, but honest I have always thought Right to buy a really bad thing, I mean really bad.

Reading this article https://www.theguardian.com/politics/2018/feb/01/labour-plans-landowners-sell-state-fraction-value and it just shows that the problem is hugely complex with a lot of conflicting rights. At the end though it does mention Right to Buy.
Its quite odd is Social Housing, back in the late 40s early 50s people were often proud to live in it, but since then there has often been a stigma attached. The term “council estate’ often being a term of depredation (is that the right word, sure there will be a pedant along soon to put me right). But most people I know from council estates are really nice hard working people. TBH honest often more decent than people from posh estates.

So why sell off a good thing?

[don]

Certainly up to WW1 and probably until after WW2, it was the norm to rent your house. Most people didn’t own a house at all. Thatcher, with her “know the price of everything and the value of nothing”, and “let the market decide” ethos decided to enable people renting Council housing stock to buy, at a ludicrously cheap price.

Right to Buy is possibly a good thing as long as it’s strictly controlled in who can buy and why. For example – the blocks of flats overlooking Lords Cricket ground in London were originally owned by the council. Under Right to Buy they were sold to the tenants, many of whom (I imagine) sold them on at a vast profit.

Right to buy could be used to adjust a Council’s stock of housing, increasing or decreasing a certain type of property depending on fluctuating demographics.

However, I do think that it’s wrong to have RTB without a corresponding building programme as well.

I also think (not connected really with RTB but a particular hate of mine) that these programmes on TV about buying to let are wrong. People with money are preventing people with much less money from getting on the ladder by snapping up properties at auction to renovate and sell on or let.

[blurty]

I also think (not connected really with RTB but a particular hate of mine) that these programmes on TV about buying to let are wrong. People with money are preventing people with much less money from getting on the ladder by snapping up properties at auction to renovate and sell on or let.

@don Ok. So if you are private sector and want to retire, you have worked hard, been prudent and not wasted money, but not been able to afford to contribute into a pension since being 18/21, were would you invest your money so that your capital is protected and you have a return to live on.

[don]

@blurty The people I’m against are those who are doing this for an on-going business, not for their retirement.

Having said that, to get any sort of reasonable income (after agent’s fees, insurances, repairs and maintenance etc) you’d need several properties – the cumulative price of which could be used to buy an annuity – just as safe (or not) as property…..property can go down in value as well as other investments…

[kath]

I tend to vote Tory, but honest I have always thought Right to buy a really bad thing, I mean really bad.

Its quite odd is Social Housing, back in the late 40s early 50s people were often proud to live in it, but since then there has often been a stigma attached.

I’ve never voted Tory, but I think social housing as aspiration was damaged when Labour prioritised housing by need in the 70s. Instead of a waiting list of (cliché alert) hard working families, the most troubled and disadvantaged were moved in. This created a lot of the stigma. There was probably also a problem with building quality, either due to corruption or low cost.

I think a right to buy at somewhere close to market price is a good thing, but massive discounts without constraints, and preventing rebuilding programs were definitely damaging.

I think the shift from rates to council tax has actually been more damaging. Shifting some of this burden back from the occupants to the land owners (neutral in the case of an owner occupier) would redress the balance between first time buyers and landlords, would increase the costs of land banking and would remove some of the incentive for leasehold stitch-ups.

[amy]

It should never have been introduced, at least not at those sort of discounts and the money should have been used to buy new council houses.

I believe this is the reason were in the housing situation we’re in now, short supply, councils paying private companies for housing stock, high rents – with consequent high house prices.

When Maggie floated this idea, she removed the council involvement in the housing market, making it a free for all, a reverse monopoly if you like.

[kaz]

I don’t think ‘right to buy’ at rates discounted in proportion to rent already paid is in and of itself a bad thing, potentially it’s a powerful tool for delivering security to families and for developing more socially mixed housing areas. That said the implementation as it exists seems a cynical and harmful piece of the austerity program used to asset strip local authorities (often Labour areas suffering greatest losses) for the benefit of central government and the continuation of their ideological agenda. That situation needs fundamental reform. Also I think that with the right to buy should come some responsibilities placed upon those who take up that right, perhaps: time limited rent control on the property and first refusal to the local council/housing association at discounted rates when the property is sold, again time limited. To my mind that strikes a reasonable balance between the interests of those in the properties and the wider public. I should add I think the sell-off should be stopped until councils are able and compelled to reinvest in a timely fashion the full amount derived from the sale in replacement stock while ever there is a shortage of social housing in the area.

[Emma]

@blurty why do you think council housing is a good thing?

In my opinion council housing encourages a sense of entitlement that is damaging to aspiration. It distorts the prrivate sector market when it is sold off at a discount. and due to corruption of proper planning processes, we have ended up with council housing ghettos in many of our towns and cities.

[karen]

No. Right to buy is fine in principle. People who have paid rent for a long time getting the ability to buy the house. It’s more like a state supported long term mortgage.

What is wrong is councils not maintaining a stock of social housing and not keeping the house prices low.

Think about how land becomes houses. It starts as land. It has little value, a field, maybe too small to farm. Or spare fallow ground at the edge of a previously developed area (old industrial site, old train line). The council grant planning permission. The value increases. The developers buy it and build houses. They need to make a profit and they need to generate revenues that support purchase of this expensive commodity. So land worth a few thousand, becomes worth £100k. The bricks and fixtures add £50k and the house sells for £200k.

If the council purchased the land at land rates, using revenue from previous sales. Granted permission to build and leased the land to the builder to build houses. The capital outlay to build the houses is lower, so small firms could get involved to build a dozen houses rather than the big housing companies. They would build the house and sell at a profit along with the individual plot of land that would be sold from the council.

The council could make a small mark-up, the builder would make a profit, and the whole house would be for sale for maybe half what the big boys sell them for. The council can have tendered the right to build the houses based on a unit price for the final sell so they could limit the price.

This would feed new houses in at an affordable rate. It would force down the rental prices, and reduce the viability of buy-to-let. Leaving more of the large housing stock at affordable prices. The whole housing market would reduce in cost per size, the losers would be investors in property – who due to the timescale of this taking effect would not so much lose money but exit with little further gains. With rent / mortgage lowered there would be more cash back in the economy, lower paid jobs would be less tight and fewer people would be on the breadline.

[needhelp]

One aspect of RTB that is often overlooked is that it allowed families who had probably never owned property, had rented and thus had never been able, to pass assets down their generations.

It allowed them to generate a small amount of wealth that could be passed to their children.

One thing that very much demarcates class in the this country is that the middle classes enjoy inter generational wealth, that they can accumulate assets with each generation, with children often being able to live mortgage free at an early age.

For many working class families, it was (and is) a cycle of rent, generation after generation. It’s hard to break out of this, get to university or make a lifestyle change is you have nothing to draw upon or leverage.

The lack of any decent or workable social housing policy thereafter RTB is another matter entirely.