Housing Associations and the Right to Buy

August 14, 2015

One of the Conservative Government’s most controversial proposals is the extension of the Right to Buy (RTB) to Housing Associations.

Legislation will be presented later this year setting out the details and the issue looks certain to inflame debate on both sides of the argument. Indeed, the House of Lords looks set to present a significant obstacle to the Government’s plans if a recent vote amending the proposed Charities Bill is an indicator.

The amendment, led by Lord Kerslake (Chair of Peabody Trust and a former CEO of the Homes and Communities Agency) if successful, would prevent charities from being forced to dispose of any asset which is against their charitable purpose. Lord Kerslake said “one wonders what George Peabody would have made of this. In 1866 he said that his donation would act more powerfully in future generations than in the present, it is intended to endure forever.”

Voluntary Housing Sector has played a key role in providing affordable housing…

Langley House Trust, in addition to being a charity is also a Registered Housing Association. The voluntary housing sector which has its roots in the Victorian philanthropic movement pre-dates council housing and at various times has played a key role in providing affordable housing to those in greatest need, when the private or local authority sectors have failed to do so.

Many of today’s most prominent housing associations still carry the name of their philanthropic pioneers. As well as George Peabody, others like Samuel Lewis, Richard Sutton and Arthur Guinness also endowed the new movement along with Bournville, Rowntree and many other committed groups motivated by Christian values. They responded to the combined pressures of poverty, destitution, disease and homelessness. The great charitable housing associations that grew out of this philanthropy provided the impetus for the modern housing association movement. It is a fine tradition and one that Langley is proud to be part of.

The reason that I think the proposed extension of the RTB is wrong is because:

  • Charitable housing association assets are not the Government’s to dispose of being frequently funded by charitable donations.
  • The objectives of housing associations are consistent with the Government’s in many ways including: developing new homes for sale, helping tenants and residents to gain skills and employment and providing an essential link between the housing, health and social care agendas.
  • In the last recession, housing associations kept housebuilding going. If the Government proceeds with RTB 2 the ability of the housing association sector to come to the rescue of the economy and housebuilding industry will be reduced.Housing associations are unlikely to develop new housing when any homes built could be immediately sold at a discount
  • History shows that following the 1980 RTB push, local authorities were promised like-for-like replacement – a promise which didn’t materialise. A report published in January 2013 by the London Assembly showed that 36% of homes sold under RTB in London (52,000 homes) were being let out by councils from private landlords, leading to criticisms that RTB “represents incredibly poor value for money to taxpayers” since it “helped to fuel the increase in the housing benefit bill, heaped more pressure on local authority waiting lists and led to more Londoners being forced into the under-regulated private rented sector”.

There is undoubtedly a housing crisis in Britain in 2015 – in my view, extending the RTB to housing associations would make it considerably worse.

This week’s blog is from Andrew Lerigo, Corporate Development Director, Langley House Trust, 14th August 2015.