How to make Right to Buy work for those in poverty

Extending the Right to Buy won’t help many housing association tenants, but it could have a damaging impact on those in housing need.  Keeping up the number of homes available at low rent is key to making Right to Buy work for those in poverty, argues Brian Robson

Right to Buy for housing association tenants will soon be a reality. The government has reached a voluntary agreement with housing associations and is also using the current Housing and Planning Bill to oblige councils to sell their ‘high value’ homes as they become vacant to pay for the policy.

The discounts on offer will only help a minority of housing association tenants become home owners.  Just 128,000 people, fewer than one in ten of all housing association tenants, are likely to exercise their Right to Buy over the next five years according to new research conducted for JRF by the University of Cambridge.

But the sale of housing association and council houses will have a damaging impact on those in housing need in the short term. For the next three years, if you’re on the waiting list you’ll have less chance of getting a house as council houses are sold off as they become vacant rather than being available for rent.  This, plus the number of Housing Association homes sold off under the new Right to Buy, risks reducing the number of new lettings by up to 19,100 per year.

The Government has promised to replace every home sold, but this will take some time. In the longer term, the real question is whether those on low incomes will be able to afford the replacement homes.

If – as the Government has suggested - the replacements are for shared ownership or let at a market-linked rent rather than the current social rents, then the answer is probably not.   Just 3% of new social renters could have afforded to buy a shared ownership property instead.

In real terms, this means after five years we’ll have up to 13,000 more families stuck in homeless accommodation, and 61,000 more paying an average of £1668 a year more to rent in the private sector.

But, if the new homes are let at the same rents as the homes they replace, Right to Buy could actually increase the number of low cost homes available to rent. Shortages of land and finance will make this difficult, but if it can be done we could begin to gain more homes available for low-cost rent after the fifth year of the scheme.  That would make a positive impact on poverty, and avoid additional pressure on the housing benefit bill.

Right to Buy will have consequences for those in housing need. Our research shows these can be mitigated if homes sold are replaced like-for-like with low-cost rented homes. It’s up to Government and the MPs considering the Housing and Planning Bill to ensure this happens.