The housing association sector and the Right to Buy inquiry

Following the 2015 General Election, the Government announced that it was seeking to extend the Right to Buy to tenants of housing associations. This policy, alongside others such as the 1 per cent reduction in social rents and a ‘pay to stay’ model which would charge differential rents according to tenant income, was likely to have a significant impact on housing associations. We therefore wanted to explore how their work and the services they provide might change, and what the impact might be for the wider social housing sector and the provision of affordable homes.

Shortly after our investigations began, a deal to implement the extended Right to Buy on a voluntary basis was reached between the National Housing Federation and the Government. We recognise that the voluntary deal is a way of delivering a key policy from the Government’s Manifesto whilst maintaining the independence of housing associations. However there remains much uncertainty in the wording of the agreement, for example regarding whether associations which voted against it are bound by its terms and the extent of the discretion to decline sales.

The extended Right to Buy is designed to increase home ownership and increase housing supply. We support these aspirations and the principle of giving people the opportunity to buy their own home. Despite this, we feel that there are unresolved issues and remain concerned that the Government’s policies could have a detrimental effect on the provision of accessible and affordable housing across all tenures, particularly affordable rented. We are also concerned that the extended Right to Buy could hinder the provision of specialist and supported housing schemes. Maintaining and protecting the provision of affordable housing in rural areas is also an issue that we believe needs to be addressed in order to protect our rural communities. The terms of the voluntary agreement allow for portable discounts to be offered in place of certain properties, but it remains unclear how this would operate.

We found that large numbers of homes sold through the statutory Right to Buy for council tenants had in a relatively short space of time become rental properties in the private sector. The private rented sector is often more expensive than social housing and the quality of homes can be much lower. Selling social housing assets at a discount, only for them to become both more expensive and possibly of lower quality housing in the private rented sector is therefore a significant concern. We believe that measures to restrict homes sold through the Right to Buy ending up in the private rented sector need to be explored.

The Government proposes to fund the Right to Buy discounts for housing association tenants with the proceeds from the sale of high value council homes. However we believe that public policy should usually be funded by central Government, rather than through a levy on local authorities.

The definition of ‘high value’ has not yet been announced, and we feel that this is long overdue and should take account of individual local circumstances. Irrespective of the methodology, the robustness of the funding model is extremely questionable. We have not seen evidence that the Government has fully costed the proposals and we call on it to do so as a matter of urgency.