Councils fight to limit right-to-buy home sales
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Version 0 of 1. Councils are setting themselves up as private landlords to protect their diminishing housing stock from the rejuvenated right-to-buy scheme first introduced by Margaret Thatcher. The government’s increase in the discount offered to tenants has prompted a massive increase in purchases of local authority accommodation. Across the country, councils are setting up wholly owned private companies that can buy up housing stock to rent out as council homes. These homes are exempt from the right-to-buy policy, which was revamped by the coalition in 2012, allowing social housing tenants to buy their homes after three years, rather than five – and with an improved £75,000 discount. The changes to the scheme, trumpeted in 2012 by David Cameron as a way to give tenants a chance to secure a “vital rung on the property ladder”, have triggered a fivefold increase in the number of tenants buying their homes. In 2013-14 there were 11,929 right-to-buy sales, according to the Department for Communities and Local Government, compared with 2,368 in 2012-13. Councils warn the rate of purchases has left them with limited options when people made homeless come to them. Increasingly, it is claimed, they are having to pay inflated rents to landlords to find suitable homes for tenants. Ahmet Oykener, Enfield council’s cabinet member for housing and estate regeneration, said his council used to sell as few as eight council homes a year to tenants under the right-to-buy scheme. They have sold 200 homes since 2012. “That has caused us huge pressures,” Oykener said. “If someone is homeless, then we have a duty to provide them with a property. And with the benefit cap forcing people out of inner London, there is huge demand for social housing in an outer London area like ours. “I think increasing the right-to-buy discounts was a bit irresponsible. Since Margaret Thatcher introduced the policy in the 1980s, Enfield has lost 50% of its council housing stock. Yet the number of people coming to us is on the rise. The bill for temporary accommodation as it stands is £3.5m. We estimate that within two years that will more than double to £8m. That is why we have to be innovative.” Enfield set up a wholly owned private company called Housing Gateway this year. Officials have viewed 122 properties, made offers on 77 and had 48 accepted. The company currently owns 22 homes and has tenants in five of them. Oykener said he ensured tenants in those homes would not be eligible to take up the right-to-buy offer. “I specifically ensured that was the case. These special purchase vehicles, along with other benefits, are exempt from right-to-buy so that we won’t end up in this predicament in three years. We are not alone, councils all over are doing this.” Other councils taking the radical step include Sheffield, Sutton and Ealing, according to Labour MP Gareth Thomas. Thomas said he hoped this new model would also lead to an increase in “co-operative” homes, whereby housing blocks owned by a private company are run and managed by tenants. One example of co-operative housing, although not owned by a council, is in and around the Oxo Tower on London’s South Bank, which was redeveloped in the 1980s and 90s by Coin Street Community Builders, a social enterprise trust. Thomas, who is chairman of the Co-operative party, a parliamentary group affiliated to the Labour party, said he was in talks with the Labour leadership over establishing a target for 20,000 new co-op homes each year by 2020, and that the new model being pioneered by councils could help. “Given the huge loss of affordable homes in London, in part because of the failure to replace those sold under the right-to-buy, the next mayor of London needs to consider setting up a London housing company to help build high-quality social housing, particularly co-operative housing of the sort found on London’s South Bank,” said Thomas. |