The Blog

Extending Right to Buy Is a Monumentally Stupid Idea, and Thinking That Doesn't Make you a Miserable Marxist

This policy might buy the Conservatives some votes, but at a heavy cost to the country as a whole. If thinking this makes me a dour communist, paint me red and call me Karl.

I'd hoped that I could survive this election by restraining my opinions to just sounding off in the pub, rather than feeling I had to write something that might invite the sort of tedious facebook comments discussion we all know are best avoided. Then an article floated up into view that got me worked up. It was entitled 'WHY SHOULDN'T WORKING PEOPLE OWN THEIR HOMES?' with the rejoinder that "Anger over right-to-buy sums up the left's municipal miserabilism". It essentially paints a picture of anyone who, like me, opposes the great sell-off of Social Housing, as some sort of sourpuss Trotskyite. Well, I've run a company in the construction sector for the last five years (my biog probably still calls me a comedian but it's no secret that making a living from comedy is precarious at best, even when you've reached the heady heights of being in a BBC3 show...), and I'm deeply uneasy about this ill-thought out policy. Luckily, it seems I'm joined by some far more authoritative voices.

The Confederation of British Industry and the British Chambers of Commerce have panned the plan for failing to address the underlying shortage of homes. In agreement is Adam Challis, head of residential research at property experts Jones Lang Lasalle, saying "This is exactly the kind of short-termist thinking that the countries' 4.7 million households in social housing don't need, not to mention the same number again of aspiring owners in private renting. Right to Buy benefits a select few while condemning the vast majority to longer waiting lists and fewer choices." But then, it's probably just the whinings of a bunch of gloomy pinkos. You'd have to be a humourless communist to think that this £5.8 billion state subsidy is a bad idea. And £5.8 billion is a conservative estimate - it could be a hell of a lot more. Would this money not be better spent actually building the affordable housing that is so badly needed? In a terse radio 4 interview recently, Theresa May countered that it would be paid for by councils selling off their most expensive stock that would be replaced on a one-to-one basis. What, like the housing that was replaced on a one-to-one basis under the previous Right To Buy scheme? Or, in fact have we suffered from under-investment in the housing sector for decades (under governments of both flavours) that have brought us to the crisis point of people being trapped in sky-high rents without the prospect of ever being able to own their own homes?

But back to the article that first annoyed me. The author - who, ironically enough seemed to be using it to plug his book about the demand for housing - states: "it is right to say that the reform will not solve the housing shortage (for the same reason that it will not make it any worse)". This completely ignores the fact above that the scheme costs money that could be spent elsewhere. But let's put that aside for moment and consider the likely trajectory of the houses bought. With the original right to buy, many simply sold them on to private landlords for a tidy profit. It's not inconceivable that the pensioners with newly freed-up lump sums might take punt on property and join the ranks of the so-called 'granlords'. In London, 36% of homes sold under Right To Buy are now owned by private landlords. The same landlords that go on to charge far more than the councils had, leading to spiralling rents. Plus, the money that councils had previously taken in rent is now simply going into the pockets of private landlords. You know what that rent money could have been used for? BUILDING MORE HOUSES.

What's even worse, councils lacking housing have sometimes paid for private rented accommodation for homeless people rather than have them languishing on the streets. They're then paying rents at market rates to private landlords for the houses that had been sold off at below market value. Taxpayers have paid for a house to be built, were forced to sell it off at a discount, and are paying over the odds for its usage. This is the worst possible form of socialism. Under the new plan in the case of the housing associations, they borrow money to build new homes based on the income they derive from rental. If they're forced to sell off those houses, they'll be unable to raise the capital and so be less able to build houses in the future. When we're faced with such a shortage - we need 240,000 homes but only managed to build 141,000 last year - it seems utter madness to disincentivise house building.

In short, this policy amounts to a state subsidy for a few social housing tenants and ultimately for the private landlords that will go on to own many of the homes. The money could be far better spent building homes for the people of Britain rather than turning the market into a Ponzi scheme that benefits a few whilst pushing the dream of owning a home further away from ordinary young people. This policy might buy the Conservatives some votes, but at a heavy cost to the country as a whole. If thinking this makes me a dour communist, paint me red and call me Karl.

Before You Go