Posts with tag: right to buy

Housing pledges announced in Prime Minister Boris Johnson’s speech

Published On: June 13, 2022 at 8:57 am

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Housing pledges announced in Prime Minister Boris Johnson’s speech

Prime Minister Boris Johnson has announced a number of housing pledges. This includes extending Right to Buy to housing association tenants and allowing housing benefit to cover mortgage payments.

Responding to the announcement, Kiran Ramchandani, Director of Policy and External Affairs at Crisis, comments: “This ill-conceived announcement is the exact opposite of what we need to tackle the mounting housing crisis. For decades our social housing stock has been stripped bare, while over 96,000 people remain trapped in dingy B&Bs having given up all hope of ever moving into a home of their own. The notion that we’ll now sell off what little affordable housing we have left will only serve to make this situation worse.  

“The reality is that with housing benefit currently frozen, it’s barely enabling anyone to rent as it is. To suggest this money can now be used to secure mortgages without a costly investment to the benefits system is an utter fallacy.

“Moreover, it seems the Government is intent on creating a two-tier system where only working households will be able to use their housing benefit towards a mortgage payment, disregarding people with disabilities and those unable to work.    

“The only way to fix our broken housing system is to build more social homes which people can afford – we urge the Government to get on with doing this if we’re ever going to end homelessness for good.” 

Dan Wilson Craw, Deputy Director, Generation Rent, comments: “Ultimately, the Prime Minister failed to set out action to deal with the unaffordable level of house prices and rents.

“Neither the review of low-deposit mortgages, nor extending Right to Buy to housing associations will address the shortage of homes we need in places people most want to live. For that we need a programme of social house building beyond the one-to-one replacement of homes bought under Right to Buy.

“In the pandemic we heard from renters who had to pay rent with their hard-earned savings because they weren’t eligible for Universal Credit. Expanding eligibility to people saving a deposit will restore some fairness to the benefits system, but it’s important to remember that many more people with no savings are struggling to find somewhere to live with current Local Housing Allowance rates.

“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.”

Marc von Grundherr, Director of Benham and Reeves, comments: “We’ve seen how previous initiatives allowing social tenants to purchase their properties has backfired, as it causes a significant shortage of stock for those most desperately in need of help, while also driving up property values in the process. 

“Of course, this time around it will be different, as they pledge to replace these purchased properties on a one for one basis. Unfortunately, if you believe that, you may also believe that the drunken shenanigans that took place at Downing Street during the pandemic really were innocent, work-related events. 

“The Government’s record of delivering new homes is woeful at best and social housing has long been an area of serious neglect. To allow them to auction off existing housing association stock while also failing miserably to replace it would be a big mistake indeed.”

James Forrester, Managing Director of Barrows and Forrester, comments: “Boris Johnson claims of a significant increase in the number of homes being built, but this simply isn’t true, which will come as little surprise given the fact that he’s lied to the British public time and time again. 

“In fact, the level of new homes reaching the market each year has fallen by fourteen percent and so once again, Boris’s bumblings couldn’t be further from the reality. 

“What’s more, promises to utilise Britain’s brownfield land is nothing more than a weary piece of recycled rhetoric, spouted on numerous occasions to create the illusion of tackling the housing crisis, but without actually following through with it.”

Labour Party Conference should consider ‘Right to Buy’ plans carefully

Published On: September 20, 2019 at 9:46 am

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Categories: Landlord News

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Right to Buy

Labour Party plans to give tenants the right to buy their privately rented home should be debated extensively, says lettings payment automation provider PayProp.

This issue is due to be discussed at the Labour Party’s annual conference, which begins on 21st September.

Controversial plans unveiled by Shadow Chancellor

It was earlier this month that Shadow Chancellor John McDonnell announced plans for a private rental sector ‘Right to Buy’ scheme that will allow renters to purchase their homes from private landlords.

He informed the Financial Times that tenants would be able to purchase homes below market value at criteria set by the government.

McDonnell said the plans would aim to prevent landlords who neglect to maintain their properties from making a ‘fast buck’.

However, this is a worry that this scheme could lead to a mass buy-to-let selloff, causing property values to plummet.

Neil Cobbold, Chief Operating Officer of PayProp UK, says: “These proposals are not yet party policy and they need to be considered very carefully before being put forward as the official party line.

“The effort to help tenants buy their own homes is understandable, but it shouldn’t be at the expense of landlords. Politicians must also remember that many people now choose to rent due to the flexibility and lifestyle benefits it offers.”

A fair system needed for all parties

The Centre for Policy Studies has suggested that landlords should be given incentives to sell their properties to tenants, including Capital Gains Tax rebates.

Meanwhile, the Residential Landlords Association says any ‘Right to Buy’ measure should be voluntary for landlords, or else it would amount to a ‘form of compulsory purchase’.

Cobbold says: “There is nothing wrong with giving private tenants the option to purchase properties from landlords, but any such system must provide benefits for both parties.

“Private landlords have been hit with a range of tax changes in recent years, including additional stamp duty and the removal of buy-to-let mortgage interest tax relief.”

“If landlords were offered some sort of exemption from these measures in exchange for selling their properties to tenants, this could create a scenario that is fair for both sides of the transaction and benefits the overall health of the UK property market.”

Party conference season reinforces housing priority

The Liberal Democrats debated scrapping Section 21 at their conference last week. The Conservatives are also expected to discuss the eviction issue – as well as agents’ referral fees – at their annual gathering in Manchester from September 29.

Cobbold concludes: “This year, with a potential General Election in the offing, the stakes at party conference season are higher than usual. We expect to see lots of talk on housing at the Labour and Conservative conferences as they look to form key policies ahead of a potential campaigning period.

“New housing policies – and those covering the private rented sector in particular – could be pivotal in securing key votes in the coming months.”  

New ‘Right to Buy’ proposal will provide tenants with opportunity to purchase their homes

Published On: September 3, 2019 at 8:02 am

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Categories: Tenant News

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A proposal has been made for a new ‘Right to Buy’ scheme by Shadow Chancellor John McDonnell.

His plan is to help millions of private renters in the UK to eventually buy their homes. In an interview with the Financial Times, he highlighted that he plans to tackle the “burgeoning buy-to-let market” and the issue of problem landlords uninterested in improving housing for tenants.

McDonnell told the Financial Times that the Government should establish the criteria for a reasonable price for a property and then this would become the right to buy.

David Smith, Policy Director for the Residential Landlords Association (RLA) has commented on this news: “Labour’s proposal would effectively kill off a large part of the private rented sector denying a home to many thousands of people. If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance. 

“The RLA is all in favour of landlords selling to sitting tenants but it must be entirely voluntary. Anything else amounts to a form of compulsory purchase.” 

Chris Norris, Director of Policy and Practice at the NLA, said: “To suggest that private landlords should be selling their properties to their tenants at a below market rate arbitrarily set by politicians is ludicrous. Landlords had to pay market rates themselves. It’s only right that, if and when they decide to sell it, they can do so at market rates. 

“If Labour does indeed wish to fix the housing crisis, they should focus on encouraging the government to build more social housing, which is what the housing sector is lacking.”

“John McDonnell’s assertions that landlords are looking for a quick buck and don’t maintain their properties shows a serious lack of knowledge about how the vast majority of landlords run their businesses. These good landlords should not be punished for the sins of the few who fail in their obligations to provide tenants with a decent home.”

4 in 10 Right to Buy Homes in London Now Owned by Private Landlords

Published On: January 24, 2019 at 10:01 am

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Sheffield Landlords

More than four in ten (42%) homes in London sold by local authorities under the Right to Buy scheme are now owned by private landlords, according to a report by Tom Copley, a Labour London Assembly Member.

Tenants living in these Right to Buy homes now pay more than twice as much in rent as when local authorities owned the properties, the study reveals.

Ever since Margaret Thatcher declared her belief in a “property-owning democracy” and introduced the Right to Buy scheme in 1980, the UK changed into a country that saw homes as something to make money from, not just to live in. This was illustrated by the buy-to-let boom of recent years, which has fed the stereotype that Britons are obsessed with property.

However, very few people expected so many Right to Buy homes to be owned by private landlords, especially in the capital.

Copley stresses: “Something has gone very wrong when tens of thousands of homes built to be let at social rents for the public good are now being rented out at market rates for private profit, sometimes back to the very councils that were forced to sell them.

“The Right to Buy is failing London and should be abolished.”

The report also found that 466 individuals or companies have the lease for at least five Right to Buy homes each.

The Government’s commitment to build a replacement for every social rental home sold through Right to Buy is currently unfulfilled; Copley argues that it shouldn’t be, if they are simply going to be sold off.

He has called on the Government to exempt new build council homes from Right to Buy and create legislation that prevents Right to Buy homes being let on the private rental market.

He says: “Many councils are building new council homes again for the first time in a generation. But we risk treading water or even going backwards if we continue to lose precious existing homes to Right to Buy.

“At a time when the need for homes at social rent level far outweighs the numbers being built, it’s reckless to continue to force the discounted sale of council homes.”

Just 1.6% of Households in Right to Buy Pilot Apply to Buy Their Home

Published On: August 19, 2016 at 8:37 am

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Just 1.6% of the households in the Right to Buy pilot scheme areas have applied to buy their social home, according to new figures.

Just 1.6% of Households in Right to Buy Pilot Apply to Buy Their Home

Just 1.6% of Households in Right to Buy Pilot Apply to Buy Their Home

The National Housing Federation (NHF) revealed this week that the five social landlords operating the pilot scheme have only received 790 applications.

The 1.6% figure is much lower than the 7% take-up rate projected by academics at Sheffield Hallam University in February, and considerably down on the 20% estimate made by a committee of MPs in October.

The Right to Buy pilot scheme is currently underway in parts of the South East, London, Norfolk and Merseyside – details of the number of applications in each area are not available.

Under the pilot, tenants are required to have lived in social housing for at least ten years.

However, many homes, including those built through section 105 planning obligations, were excluded from the pilot. In the main scheme, many of these tenants will be granted a portable discount.

The 790 applications represent just 5% of the tenants eligible for the scheme and living in a home that was not excluded, according to the Department for Communities and Local Government (DCLG).

A spokesperson for the DCLG states: “We have always been clear that this is a small sample to test the new scheme before we roll it out nationally.”

The Government is yet to confirm the precise eligibility criteria that will apply in the full scheme.

The Chief Executive of Notting Hill housing association, Kate Davies, believes that demand is limited in London, due to affordability issues and high property prices.

Just 600 of the 790 applications were authorised under the pilot scheme, but unless more than 75% of the applications turn into completed sales, this allocation will not be taken up.

However, the Director of Strategy at pilot landlord Riverside, Hugh Owen, said in June: “We have had to carefully manage numbers throughout the pilot, but we are getting a sense that there is genuine pent up demand, and it is sobering to note that the survey reveals that more than 60% of those who have expressed an interest but not applied claim they will.”

Do the new figures prove that the scheme will be a failure?

Council leaders call for Right-to-Buy reform

Published On: August 11, 2016 at 9:24 am

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Council leaders in England have today called for the Government to make reforms to the right-to-buy scheme in light of new figures.

Analysis completed by the Local Government Association reveals that 12,246 council properties were sold to tenants under the scheme in 2015/16. However, just 2,055 replacements were started by councils, a fall of 27% on the previous year.

Right-to Buy

The Right-to-Buy scheme was designed to allow low-income tenants to purchase their council-owned home at a discounted price.

Since its inception in the early 1980’s, nearly 2m properties have been sold to these tenants by councils across England. As a result, the proportion of homes that are social housing have fallen from 31% to 17%.

Numbers of people using the scheme were on the downturn, until the Government re-launched the scheme in 2012, offering quadruple discounts for London tenants.

The scheme has already been scrapped in Scotland, with the Welsh assembly also confirming plans to abolish it. Now, the Local Government Association has said that the scheme could become defunct in England, if more is not done to fund replacement homes.

Replacements

Representing 370 local authorities across England, the Local Government Association said it expects 66,000 council properties to be sold to tenants by the year 2020. Councils are expected to struggle to replace many of them.

A further 22,000 properties will be sold should councils be forced to offload higher-value properties to fund an extension of the scheme to housing associations. In their manifesto before last year’s general election, the Government promised to make discounts available to 1.3million housing association tenants.

The Local Government Association warns that a fall in council homes would exacerbate the housing crisis, with an increase in homelessness and spending on housing benefit.

Council leaders call for Right-to-Buy reform

Council leaders call for Right-to-Buy reform

Re-launch

Since the re-launch, the Government has pledged to provide one-for-one replacements for additional homes sold. The Local Government Association said that prompt reform is necessary to ensure councils replace stock efficiently.

The Association believes authorities must keep 100% of receipts from sales, as opposed to the one-third they can currently retain. In addition, it has called for discounts to be set to reflect regional variations in property values.

Nick Forbes, senior vice chair of the Local Government Association noted, ‘Right to Buy will quickly become a thing of the past in England if councils continue to be prevented from building new homes. Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult. Such as loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.’[1]

Commitment

The Department for Communities and Local Government (DCLG) said that the Government was prepared to undertake action to ensure the provision of additional homes.

It noted, ‘we’re committed to building the homes this country needs and investing £8bn to build 400,000 more affordable homes. There is a rolling three-year deadline for local authorities to deliver an additional affordable home and so far they have delivered well within their sales profile.’[1]

‘However, we have always been clear that if local authorities don’t start building replacement homes within the three-year deadline, then we will step in and build them for them.’[1]

[1] https://www.theguardian.com/society/2016/aug/11/right-to-buy-reform-urged-as-council-leaders-fear-for-social-housing?CMP=share_btn_tw