Housing sector

Housing industry slams Johnson’s plans to extend right to buy | New

Housing industry groups have criticized government plans to expand the Right To Buy scheme to allow housing association tenants to buy their homes.

Boris Johnson unveiled the move in a speech in Blackpool this afternoon, widely seen as a bid to reset his post as prime minister after Monday’s vote of no confidence, which the prime minister narrowly won.

Johnson said he wants the program – which is partly aimed at tackling rising inflation – to be expanded “within existing spending plans” and for every home sold to be replaced.

But housing bodies have hit back at the plans, saying sales under the scheme would not bring in enough money to build one-for-one replacements.

National Housing Federation chief executive Kate Henderson said the organization was “deeply concerned” about the long-term impact of Right To Buy.

She said: ‘The right to buy pilots showed that there was not enough money from sales to build new social housing to replace those sold, which means a net loss of social housing.

“We support measures to help people buy their own homes and housing associations are already building thousands of condominium homes each year, helping people to take their first steps on the housing ladder.

“However, we are deeply concerned about the long-term impact of the right to buy and any loss of social housing will make the challenge of providing homes for those in need even more difficult.”

Designing a housing association right to purchase program that is fully funded and raises enough money to pay for one-for-one replacement housing has proven difficult in the past. David Cameron’s government announced a plan in 2015 to fund a scheme by forcing councils to sell higher value properties as they empty. The right to buy extension has been piloted by housing associations but has not been rolled out nationwide due to concerns over its funding.

British Property Federation policy director Ian Fletcher said the policy ‘fundamentally misses the central problem’ of helping people access social housing and reducing waiting lists.

“Extending the right to buy risks exacerbating this challenge by diverting public funds away from the new supply of affordable housing,” he said.

Fletcher added that it was important that the expansion of the program did not risk undermining private investment in the housing sector and reducing the supply of new housing.

JLL’s director of residential research in the UK, Marcus Dixon, said around 80 per cent of tenants would not be able to buy their homes without a discount, which the housing association could not. offer due to existing cost pressures.

He said: ‘Housing associations are unlikely to be able to offer sufficient discounts and replace like-for-like stock without government support.

“Even without the right to purchase, housing associations are under significant financial pressure.

“Along with investing to improve their current portfolio, they will need to ensure all remediation work is done to address cladding and fire safety, as well as initiate plans to achieve zero carbon targets by 2050. Not to mention additional investments to increase the size of their rental portfolio.

See also >> Right to buy for housing association tenants is ‘not the right policy’

See also>>Gove commits to ‘one-for-one’ replacement in Right to Buy housing association

Meanwhile CPRE’s director of campaigns and policy, Tom Fyans, said the announcement would do nothing to address rural housing shortages, calling it “another example of a government losing out.” quickly come into contact with the realities of rural life”.

He added: “The number one lesson of rural right to buy is that it has decimated rural social housing stocks. What low-income families need are hundreds of thousands of truly affordable homes to live in. Those who live in the countryside are hampered by low wages and high house prices. This is why the government must commit to building 145,000 social housing units per year to fill the gap between supply and demand.

“The demand for social housing is growing almost six times faster than the rate of supply in rural areas. At current rates, the backlog of low-income families in need of housing would take 121 years to clear. This is a totally unsustainable situation and the potential sale of the few remaining housing association properties we have will make a bad situation immeasurably worse.

Johnson also confirmed plans followed by Michael Gove yesterday to allow people on Universal Credit to use benefit payments to access mortgages.

The prime minister said the ‘benefits to the bricks’ scheme would ‘help millions realize the dream of home ownership’.

Currently, Universal Credit is only available to people with savings of less than £16,000 and is generally not available to someone with a mortgage.