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Should you use Right to Buy?

  1. 04 August 2017
  2. By Andi Michael

With Wales following Scotland in suspending Right to Buy, reallymoving asks if England will follow, or whether Right to Buy is the wrong way to go. 

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Wales have now officially suspended the Right to Buy Scheme, explaining that it needs to ‘safeguard’ existing housing provision. Flintshire County Council was granted a suspension from the scheme last February, as the availability of housing became problematic. The fact that the rest of Wales has followed, along with Scotland suspending Right to Buy last year, suggests that the two governments are taking a stand.

Brought in under Thatcher in 1980, Right to Buy was outwardly concerned with social mobility, allowing those who had lived in council housing to buy their homes at a reduced rate. This allowed more people to get onto the property ladder, where they would not otherwise have been able. However, the main advantage for government was an increase in revenue. Housing was sold off, and the responsibility of government was diminished.

Right to Buy is incredibly contentious, with valid arguments on both sides. Helping people onto the property ladder is an excellent thing, and some could compare it to the Help to Buy options available to first time buyers – it is a tool to help those who would have trouble buying succeed in ownership.
However, the main criticism of the scheme is that council houses are being sold, and not replaced. Not enough building of new provisional housing is ongoing. In the last 37 years since the scheme was created, there has been over a 45% reduction in social housing in Wales. In Scotland, nearly 500,000 council properties have been sold. In England, the Chartered Institute of Housing suggests that 370,000 more council houses will be sold in the next three years. As only 5,000 new homes have been created for social housing purposes in England since 2012, the concerns about driving up house prices is justified, along with quality of living for those who need support.

Another concern is the fact that 40% of flats sold under the scheme are now in the hands of private landlords, driving up rental prices and in some cases, renting them back to the council at a higher rate.
The county of Flintshire in Wales tried to counteract the losses by creating a ‘buy back’ initiative. If, after buying your council property, you later decide to sell it, the council must be offered the opportunity to buy it first. This only applies if you are selling it within 10 years of purchasing. It is a good attempt to regain land lost by the council, but practically it is hard to see how the government would be comfortable, having sold a property at a reduced rate, to buy it back at full market value. No properties have been bought back by the council since this option became available in 2005.

England, however, stands firmly behind the Right To Buy scheme, with suggestions that it will be rolled out further. The focus is on aspiration and growth. The increase in private landlords means more wealth and those previously at the bottom of the ladder moving up. But when we consider that the average person in England spends more than a third of their month salary on rent, it suggests a plethora of problems going forward.

Northern Ireland is more tentative in its approach to Right to Buy. The scheme remains active, but the discount offered to buyers is not as generous as those in England, with a discount of up to £24,000, and some properties not being eligible, like ground floor flats that could better serve the elderly or those with disabilities. 

The clear split between England’s attitude towards Right to Buy, compared with Scotland and Wales is indicative of a directional shift, much in line with results after the Brexit referendum. For many, Right to Buy remains a chance to invest and grow where they would not have had a chance before. For others, it’s indicative of a government who will sell off property for short term profit with no thought to the long term effect on the housing crisis.




 
 

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