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Housing Association tenants should be given the right to buy

At present housing associations operate effectively as a branch of the state. often their boards are packed with Labour councillors and other left wing activists.

There is a case for making them genuinely independent charities. As such they would be self financing and they would make their own decisions on rents, on allocations, on tenure rules and on such matters as whether to sell tenants their homes and if so at what, if any discount, from the market price.

But in the absence of this approach I am attracted by the recommendation from the Labour MP Frank Field and the Conservative MP David Davis, in a paper for the IPPR, that housing association tenants should be given the right to buy.

They argue that the Thatcher  government's decision to give council tenants the right to buy their homes "transformed the lives of some of the least affluent in society , helping two million Britons become homeowners for the first time. It was a policy for the many, not the few."

Yet more recently the proportion of us that our home owners has been falling:

Ten years ago, home ownership in Britain reached 71.5 per cent. Sadly, that has proved to be a peak rather than the latest phase in an upward trend. By 2010, this figure had fallen to 1991 levels (67.5 per cent) and a recent report for the Housing Federation predicts that, by 2020, home ownership will have returned to mid-1980s levels –  just 63.8 per cent (Oxford Economics 2011). 

If this prediction is accurate, by the end of the decade there will in effect have been no net growth in home ownership in Britain over the previous 35 years.  

 Despite the downward trend, home ownership remains the objective of most people in Britain. A recent report from the Department for Communities and Local Government (DCLG) showed that 86 per cent of people would buy their home if they had the chance (Taylor 2011). Just 14 per cent said they would pr efer to rent. Among couples with children, 92 per cent would rather buy than rent. This has changed very little over the last 25 years. Almost two-thirds of renters say they aim to buy their own property within the next five years. Among all three groups of renters – private, local authority and housing association – the majority would prefer to buy rather than continue renting.

The paper makes a powerful case that thwarting this aspiration for housing association tenants is unjust.
Most housing association tenants come from the same waiting lists as council tenants, the latter have the right to buy while the  former do not. Therefore, whether or not someone in social housing has the right to buy often appears to be little more than a matter of chance. 
Even on the same housing association estate, some tenants with secure tenancies have a statutory right to buy while their fellow tenants with assured tenancies do not. The current system has created a lottery whereby a few tenants can fulfil their dream of home ownership but a growing majority cannot.This is a fundamentally unjust state of affairs.
While 61% of housing association tenants want to own their own home, 90% of them do not expect to be able to do so. Letting housing associations retain the proceed of sales would allow them to build more housing.
The report adds:
The right to buy would also encourage the development of mixed tenure housing areas containing privately owned, private rented and social housing. This is a far better outcome than huge, homogenous, monolithic council estates, which have come to be stigmatised as hotbeds of crime and social problems.
In 2009/10 state spending on social housing was £10.4 billion. But the to buy would mean releasing more funds. The author's are pragmatic about the level of discounts proposing a "modelling process" to ensure that take up is substantial but that the total capital receipts are high.
To achieve an increase in home ownership is an important test of this Government. I don't see how allowing the million families renting from housing associations to be excluded will help them meet it.


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