Boris Johnson has unveiled a series of new housing policies aimed at increasing home-ownership within the UK.
During a speech in Blackpool, the prime minister claimed to ‘be on your side’ when outlining large-scale reforms to the UK housing sector, notably extending to Right to Buy to those who rent from housing associations and allowing those on housing benefits to use some of the money they receive to pay for a mortgage on a house.
Responses from housing and beyond have been wide-ranging; though, those operating directly within social housing appear to be sceptical of Johnson’s plans.
Here’s what they had to say.
Right to Buy extension
Kate Henderson, chief executive of the National Housing Federation, said: “Housing associations’ priority is to provide homes for the 4.2 million people currently in need of social housing in England – this includes one in every five children, many of whom are living in overcrowded conditions or homeless in B&Bs and other temporary accommodation.
“Right to Buy pilots have shown that there is not enough money from sales to build new social homes to replace those sold, meaning a net loss of social housing.
“We support measures to help people buy their own home and housing associations already build thousands of homes for shared ownership every year, helping people take their first steps onto the housing ladder.
“However, we are deeply concerned about the long term impact of Right to Buy, and any loss of social housing will make the challenge of providing homes for those in need even harder.
“We will, of course, engage with the government and are keen to understand the detail about the proposed extension of Right to Buy to housing association homes.”
Polly Neate, chief executive of the Shelter, said: “The prime minister’s housing plans are baffling, unworkable, and a dangerous gimmick. Hatching reckless plans to extend right to buy will put our rapidly shrinking supply of social homes at even greater risk.
“For decades the promise to replace every social home sold off through right to buy has flopped. If these plans progress we will remain stuck in the same destructive cycle of selling off and knocking down thousands more social homes than get built each year.
“The maths doesn’t add up: why try to sell off what little truly affordable housing is left – at great expense – when homelessness is rising and over a million households are stuck on the waiting list.
“The government needs to stop wasting time on the failed policies of the past and start building more of the secure social homes this country actually needs.”
“We are deeply concerned about the long term impact of Right to Buy”
Kate Henderson, NHF
Abigail Davies, director at Savills Affordable Housing Consultancy, said: “The 18-month pilot of the Right to Buy extension showed that the cost to government was higher than grant-funding new homes for rent and shared ownership, and the number of purchases compared to applications was comparatively low.
“Housing associations also face significant challenges in replacing the social rented homes sold with properties at the same low rents.
“This comes at a time when supply of new affordable homes is already likely to fall, as housing associations switch their focus from development to investing in their existing homes to improve fire safety, quality and energy efficiency.
“Overall, there are better and more efficient ways than a housing association Right to Buy to support lower-income households to become homeowners.”
Ian Mulheirn, chief economist at the Tony Blair Institute for Global Change, said: “The latest effort to breathe life into right to buy might appeal to Tory nostalgists, but it’s a bad idea in principle and an even worse one in practice.
“If it works it risks further eroding the much needed social housing stock. But in practice it’s unclear where the money will come from to compensate housing associations anyway, so it won’t move the needle on home ownership.”
Nicholas Harris, chief executive of housing association Stonewater, said: “We have recent experience from the pilot of this Right to Buy extension in the Midlands.
“This showed that giving customers the opportunity to buy the home they have invested in, both financially and emotionally, can be hugely positive.
“But I’m not without reservations on this latest plan. We are in the middle of a cost-of-living crisis with people facing a choice between heating or eating.
“Extending the Right to Buy will diminish the supply of affordable homes available to hard-pressed families.
“I question whether this policy is the right use of scarce resources at this time when it won’t provide additional homes for the people that need them most.
“It is encouraging to hear the government commitment today that homes sold will be replaced like-for-like. In the Midlands pilot, we were able to replace homes 1:1.65.
“But this relied on us using Stonewater resources to build modern, affordable homes and not necessarily where they were sold.
“Without sufficient government funding, it will be virtually impossible to build replacements and increase the overall supply of affordable homes as needed.”
Cllr David Renard, housing spokesperson for the Local Government Association, said: “Owning your own home is an important step for many people, and an extension of the Right to Buy scheme to housing associations tenants could enable many more to get on the housing ladder.
“However, measures that support homeownership should not lead to any reduction in the overall number of affordable social rented homes.
“Any houses sold must be replaced quickly, in the same local authority area and on a like for like basis.
“Equally, the cost of discounts must not be funded from the sale of council housing stock, nor be met from existing government funding commitments for delivery of additional affordable homes.
“The Right to Buy scheme for council tenants also needs urgent reform and councils need to be able to keep 100% of receipts and set discounts locally.
“The number of new council homes being built is not able to keep pace with those sold under Right to Buy, and the discounts available, along with the funds that have to be returned to Treasury, are leaving councils with less and less resources to catch up.”
“It’s a strategy that appears to rob Peter to pay Paul”
Chloe Fletcher, NFA
NFA (National Federation of ALMOs) Policy director Chloe Fletcher said: “Far from extending home ownership in the long term, we know that close to half of all the social housing that’s been sold off so far has ended up being rented out, and at much higher, profit-driven prices. We can be pretty sure that pattern will be repeated with this sell-off.
“I am also deeply concerned about exactly how the promised discounts will be funded within existing plans.
“It’s a strategy that appears to rob Peter to pay Paul.”
Mark Washer, CEO of housing association Sovereign, said: “At Sovereign, we understand that people aspire to own their own home – indeed we are committed to support people to do just that, whether that’s through shared ownership or by providing them with an affordable home to rent that allows them to save for a deposit.
“But Right to Buy for housing association tenants is not the right answer and risks exacerbating the housing crisis.
“We will look closely at the detail as it emerges, but as an organisation that participated in pilot’s the last time the government tried this policy out we know how hard it is to deliver on its promise. It runs the risk of costing the taxpayer a huge amount of money for very little return.”
He added: “In the current economic environment, facing labour and material shortages, it is already a challenge to build the homes we need – especially the affordable homes.
“The prime minister has said that every house sold will be replaced on a one-for-one basis – we must hold his government to that promise.
“If Right to Buy offers homes to housing association tenants at a significant discount, then it must not do so at the expense of families waiting for an affordable home of their own.”
Housing benefit for mortgage payments
Dan Wilson Craw, deputy director, Generation Rent, said: “Expanding housing benefit to cover mortgage payments is unlikely to help people currently receiving benefits to secure a mortgage when they won’t pass lenders’ affordability tests.
“However, depending on how lenders respond, it may help first-time buyers in work to get a mortgage. Right now if you lose your job there is nothing to fall back on and that’s a risk for lenders.”
Ian Mulheirn, chief economist at the Tony Blair Institute for Global Change, said: “Overhauling mortgage finance to give people on moderate incomes access to mortgage insurance and long-term fixed rate loans would address a major intergenerational unfairness in the housing market.
“This could return home ownership to levels seen in the mid-2000s, putting up to 1.4m people back on the property ladder.”
Writing on Twitter, Robert Colville, head of the think tank Centre for Policy Studies, said: “Now, a quick thing on ‘using benefits to pay mortgages’. This is being generally reported as ‘the govt thinks UC claimants can afford deposits given our sky high house prices lol, even if they could its own rules prevent them getting those savings, what a bunch of idiots’.
“A few things to unpack here. Firstly, it is true that if you have savings/assets, you have to rely on them first before you can claim Universal Credit. As @CPSThinkTank’s report ‘Fair Welfare’ said, this is both really unfair and really unpopular.
“Second, it is true that pretty much no one can afford a deposit these days, and certainly not those on benefits, even if they could count them against it.
“But the classic ‘put down a deposit, get on the housing ladder’ (or ‘climb the housing cliff face’ as it is today) is only one part of the story. There are two more aspects to this.
“The first concerns the Right to Buy. Remember when I said it had become a worse deal? That’s because the moment you switch from renting to owning, life becomes far more precarious…Paying a mortgage rather than rent is overwhelmingly in your own long-term interest. Given the costs of housing benefit, it’s overwhelmingly in the state’s interest too (especially give care costs at the end of life for those without housing wealth to draw on).
“But in the short term, it’s much riskier. This is why we propose an updated Right to Buy called the Right to Own, under which people earn an extra chunk of their house with every monthly payment they make.
“(We say you shouldn’t be able to use benefits for this, because we’ve addressed the risk issue via our other proposals, but I can see where the govt is coming from.)”
“Letting people use benefits to pay mortgages should be about removing the hideous bias within the benefits system towards renters and against owners”
Robert Colville, Centre for Policy Studies
He continued: “But then there’s the other great unfairness. Thanks to the system described above, public spending on low-income and average-income households, in terms of housing support, is overwhelmingly focused on renters. We reckon 2.3p goes towards ownership for every £1 supporting tenancy
“There is a thing called ‘Support for Mortgage Interest’ to help low-income households. But as we outlined in another @CPSThinkTank report, a) you have to wait nine months, b) it only covers interest, c) it’s a loan not a grant and d) no one knows about it.
“We instinctively think ‘poor = rent, rich = own’. But that’s not true. As @jrf_uk have shown, around a third of those in relative poverty are owner-occupiers. And they currently get far less help than people in social housing, even though they’re just as badly off.”
He concluded: “So ‘letting people use benefits to pay mortgages’ shouldn’t just be about first-time buyers – it should be about removing the current hideous bias within the benefits system towards renters and against owners. Moving towards benefits based on need, not tenure.”
Before the official announcement, Torsten Bell, chief executive of the Resolution Foundation think tank, wrote on Twitter: “Let’s see the detail but there’s no way [the Treasury] will agree to allowing housing benefit to be used to pay a mortgage – huge cost implications.”
Image credit: Michael Tubi/Shutterstock
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