Paul Butterworth, legal director, Foot Anstey LLP
The government will be hoping the recently proposed changes to the right to buy scheme will act as a missing jigsaw piece in resolving the ongoing housing crisis.
These new proposals aim to create a “fairer right to buy” scheme so councils can better protect and increase their housing stock, but is this the best tactic for solving the issue at hand?
These new right to buy proposals includes:
- Increasing the tenancy eligibility period from 3 years;
- Looking at whether new builds should be exempt from the scheme;
- Increasing the discount repayment period.
The right to buy scheme was previously successful in its aim of providing tenants with a route to purchase a council home partly because discounts were large, meaning tenants could acquire homes at a comparatively low price. It seems unlikely, however, that the new fixed discount levels will provide many social tenants with a true path to ownership and even appears to make right to buy more difficult to implement. It is also arguable that the proposed middle ground approach does not achieve either the objective of protecting council stock or retaining the ability for social tenants to buy their home.
It might be worth looking elsewhere for the solution to this housing crisis issue. Government figures show that at its peak (1988-89) 135,701 dwellings were sold under the scheme. Until the crash in 2008 numbers of sales were steady if not prolific, annual sales being between circa 17,000 and 76,000 dwellings each year. Sales in the year 2022-23 were 11,172 and this seems to be an average figure since the year 2013-14.
So, should we scrap right to buy altogether? Well, Scotland abolished the right to buy scheme in 2016 and this did not result in the expected skyrocketing numbers of local authority new builds. For example, in 2012-13 there were 1,218 new build starts whereas in 2021-22 starts were at 2,391, with this falling to 1,195 in the financial year 2023-24. Whilst this move can be credited with halting the depletion of local authority housing stock, it appears to have not made any real inroad into the country’s housing crisis where in excess of 33,000 households in Scotland still experience homelessness.
These new right to buy amendments are unlikely to have a significant impact on dealing with England’s housing crisis, especially with the prominence of greater structural problems in the housing sector with issues including planning system delays, as well as labour and materials shortages. Councils could arguably manage their housing stock in a more proactive way, however, to achieve a greater impact on the issue of long housing waiting lists. More focused use of powers through repossessions of Council owned housing stock to minimise under-occupied properties could be one avenue to free up their stock for those in greater need.
There is also a staggering 676,304 recorded empty homes in England in October 2022.
Local authorities have wide ranging powers to deal with empty homes but perhaps there ought to be an easier route to Compulsory Purchase which would enable much more effective use of existing vacant housing stock to address this issue.
It is always going to be controversial to either use repossession powers or Compulsory Purchase powers to free up and better manage stock. When looking at the numbers of properties involved, however, there does seem to be far better ways to make a dent in the housing crisis than solely focusing on right to buy where it appears the stable door is being shut long after the horse has bolted.
