Right to Buy and “common ownership” are mutually exclusive

…the idea of a home for life handed on in common ownership to future generations is an idea worth fighting for.”

Lisa Nandy

What is Labour’s position on Right to Buy? Inside Housing reports from the Labour Party conference that

“…Ms (Lisa) Nandy was asked at a fringe event where Labour stood on the policy that the current Conservative government has pledged to extend. The shadow levelling-up minister told the audience that the policy was under review, but for her the issue was that councils were never able to keep the receipts from the sales and replace the stock (our emphasis).

This appears to contradict what Lisa said in her speech to the conference: “the idea of a home for life handed on in common ownership to future generations. Is an idea worth fighting for.”

It certainly is worth fighting for because in England there are now less than 1.6 million council homes left. Even if councils were able to keep all receipts for sales they would have to build at least 10,000 council homes a year just to replace homes sold. That many haven’t been built for more than 30 years. Moreover, RTB means councils losing rental stream, leaving them with less money for the maintenance and renewal of their existing stock.

Although housing wasn’t discussed at this year’s conference, the overwhelming opinion of the membership is that RTB should be ended. They recognise that it is one of the key causes of the housing crisis. The acute shortage of council housing is the reason why so many people are on the waiting list1 and nearly 100,000 households are languishing in temporary accommodation.

So long as RTB remains then keeping all the receipts is preferable to handing them over to the government. Yet even if councils could keep 100% this would be insufficient to pay for the much higher cost of new building, especially if the current level of discount was left in place.2

From the discussions we have had with senior figures the real root of the Leadership’s prevarication over ending RTB is their fear that the Tories will accuse them of opposing “aspiration”. The answer to that, of course, is that if more council tenancies were available then lots of people would have the aspiration to have one rather than be forced to live in the expensive, and often poor quality, private rented sector. People bought council homes because they were given away on the cheap. It was an expression of self-interest which ignored the social consequences of the sell-off. It was just a modern version of “getting on” or “keeping up with the Jones’s”.

The aspirations that many people have today are to be able to feed their children, and afford to eat, themselves, as well; to be able to afford to put on the heating; to be able to have a secure tenancy (a “tenancy for life”) rather than having to keep on moving in the private sector and struggling to pay the rent.

Council housing is the “common ownership” that Lisa Nandy referred to in her speech. It is a publicly owned asset rather than a commodity. With an acute housing shortage it makes no sense to turn council homes into commodities which not only get sold off but end up in the hands of private landlords. An estimated 40% of council homes sold off end up as private rental properties which drive up the benefit bill because of the higher rents.

Before RTB was introduced council housing used to facilitate home ownership because the very reasonable rents allowed people to save up for a mortgage. They then handed back the keys to the council and it was passed on to somebody on the waiting list; “handed on in common ownership to future generations”.

When RTB was ended in Scotland and Wales there was no great opposition to it. It is high time that Labour accepted that it is in the social interests of all those on the waiting lists to end RTB in England too. When that is done and funding for new build is provided then for the first time since the policy was introduced the council housing stock can be increased. Without this the housing crisis will be protracted at the cost of continuing housing insecurity and poor living conditions.

When Lisa Nandy says that “housing isn’t a market” she is mistaken. That’s just the problem. House building is dominated by the big builders/developers building homes for sale on the market. Council housing, on the other hand, isn’t part of the market. It is housing built for social need. Housing as “a fundamental human right” cannot be provided without ending the conversion of council housing into a commodity through RTB, nor without funding a large scale council house building programme of at least 100,000 a year, as the 2019 and 2021 Labour conferences overwhelmingly voted for.

The Labour Campaign for Council Housing has asked Lisa Nandy for a meeting to discuss this and other policy issues.

Martin Wicks

September 30th 2022

1In March 2021 there were 1,187,000 households on the waiting lists in England. This is an under-estimation of the real situation since councils have found means of excluding people from the lists on various grounds.

2 Although government grant is the key factor in the scale of council house building, borrowing is usually involved, to some extent. The current crisis precipitated by the government has resulted in an interest rate of 4.92% for a 30 year loan for councils borrowing from the Public Works Loans Board. Last December the interest rate was 1.8%. That’s an increase in annual interest payments from £900,000 to £2,460,000. Plans to build are likely to be put on hold.

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