Thatcher offered a Right-to-Buy; Cameron will add a Right-to-Move

Tomorrow at 11am Grant Shapps MP, Shadow Housing Minister, will launch Stage II of his approach to housing.  Stage I included incentives for local communities to accept new housing.  Stage III will look at urban regeneration.

We'll have more in the morning on Stage II but BBC1's Six'o'clock News has just lifted the veil on plans to introduce a new Right-to-Move.  The Centre for Social Justice has already highlighted the extreme problems of some social housing 'ghettoes' and some CSJ ideas - such as equity rewards for good tenants - have found their way into tomorrow's announcement.  The work of previous Housing spokesmen, Michael Gove and John Hayes, is also coming to fruition in what has been titled 'Extending Opportuinities'.

The key proposals from Grant Shapps are:

• The piloting of a ‘Right to Move’ by half-a-dozen local authorities where good social tenants can demand that their social landlord sell their current property and use the proceeds, minus transaction costs, to buy another property of their choice – anywhere in England.  The new home will remain a state-owned property but will aid mobility.  The innovative Hammersmith & Fulham council have already expressed an interest in being part of the pilot.
• Harnessing the power of the internet there will be the reintroduction of a comprehensive national mobility scheme for tenants who wish to move but to stay in the social sector - matching people who want to move beyond local authority boundaries.
• Protection of Right to Buy discounts for tenants moving within the social sector.

Tim Montgomerie

8.30pm: It has just been drawn to my attention that The Right to Move was a Policy Exchange idea.  More here.

Comments

[Marian]

"The piloting of a ‘Right to Move’ by half-a-dozen local authorities where good social tenants can demand that their social landlord sell their current property and use the proceeds, minus transaction costs, to buy another property of their choice – anywhere in England. "

Now this is the kind of clear blue thinking that will attract votes. What a great idea, in fact it sounds almost to good to be true.

[Westminster Wolf]

Good stuff but expect local authorities to oppose it.

[snegchui]

A note of the caution: It is an interesting idea and I can see the merits.
But
(a) What veto will the receiving authority have on the purchase? They are being asked to take the property on and will want a say on its state of repair etc. This can vary from the legitimate to the obstructive and will add to transaction costs. It is a tricky bit that will need careful attention.

(b)Will the selling authority be able to buy the house itself it it wishes to retain it and just fund a move? This may become moot if whole hordes move from London and leave authorities forced to sell with very reduced social housing stock? Will the proceeds have to be ring-fenced for new social housing?

(c) Will leasehold properties in private blocks be excluded by default by the receiving authority?.

[Steve Foley]

Sounds like a great idea to me.

The more I read of Grant Shapps the more I like him.

[Jon Harvey]

Interesting idea I think - worth exploring.

I am wondering how it would work for people living say in a run down part of Gateshead and wish to move to, say, Hammersmith. How will this be funded as the difference in housing costs would be huge. Will the areas from which they wish to move become even more run down - or could they become gentrified? What happens if no one wants to buy the original property?

Lots of questions - what we need is a simulation to see how it would work in practice.

[joshuwahwah]

Once again the sums don't add up. First of all I will say that this is a great idea and I really mean that.

Unfortunately and just like the council tax freeze this is nothing to do with central Government and is a local Government issue. Also, many councils have sold off housing stock to private landlords. These landlords cannot be forced to do anything. There is also (and remember I said this was a good idea) a major problem. If you move a nice family out then who replaces them? surely if they want to move in the first place it is because they don't like the area, most likely because of the other tenants. So what happens to the bad tenants? some council estates are like ghettos now, surely this will get worse and put more pressure on local services.

Instead of good people having to move out of somewhere they may have lived all their lives. Or families moving where their kids are settled at school.How about dealing with the trouble causers. Stop their benefits, give them vouchers instead. No more Sky,42" TV's, fags or booze!! Bloody hell. Have I been hanging around here too long? that was quite a right wing outburst.

[snegchui]

Aaah, a two-shirt socialist. I remember years ago a member of the Communist Party (GB) espousing upon the brutality of the Police in the lead up to the Brixton Riots. Then somebody stole his bicycle. His comments made Judge Jeffreys a model of restraint in the pursuit of justice.

[joshuwahwah]

I like that phrase... The voucher system is something I have always believed in. You can imagine how upset people get at CLP meetings!

[Chips of Brookfield]

Having grown up on a council estate I suspect that the people in good social housing will want to stay and the people in the run-down areas will have to stay and no one will buy their damp flat in a high-crime area. If anyone does buy the poor housing it will be for a price that will be so low that a move will be impossible.

[Jack Stone]

These are excellent policy`s. They are the sort of policies the country needs. They do not just aid mobility they give more opportunity`s to those that have few.

[Steve Tierney]

I really like this. What an innovative and exciting idea.

[thelocalgovernmentofficer]

Where's Justin, I need to admit that I was wrong - the tenant of the famous £1.2 million council house is going to find themselves living somewhere extremely nice indeed soon!

[Paul D]

I think it's a great idea in principle, but as have been listed here there are a few issues that need considering

What it will do is allow social housing tenants a greater mobility in taking up employment - currently I suspect they're rather tied to the area they live in if they want to find work. Hopefully this added freedom will aid their upward mobility, ultimately enabling them to leave the social sector and buy or rent privately

[Paul D]

In fact I'd suggest that anyone applying to move on the grounds of finding employment elsewhere sould be priority 1 under this scheme

[YMT]

Although the idea needs to be fleshed out a bit more, I'm encouraged by the idea of using rewards to promote good behaviour and social mobility, end of something for nothing but brining in a era of fair play, if people make the effort then the state should provide the mechanism and environment for their lives to drastically improve while coming down hard on the people who abuse the system and ruin the lives of their community.

[Kevin]

People are perfectly capable of moving house without state interference. Especially if they're in the rented sector. Where's the money going to come from when hordes of people want to move from Coventry to Exeter, or Bath sounds quite nice, perhaps Sevenoaks so they could commute. This sounds half baked and discourages people from being self reliant.

[Yet Another Anon]

There's a tenancy exchange system for social housing.

I have a bad feeling that a scheme requiring social landlords to buy housing in other parts of the country is going to be a disaster, they could end up owning a few properties way out of the way of where their contractors operate, why would for example Manchester City Council want to own property in Cornwall for example, I also notice that the proposal applies also to Housing Associations - this sounds like the worst form of state interference in what are supposed to be autonomous bodies.

If on the other hand there was some kind of right to buy scheme for tenants from other areas and Social Housing had to be made available for purchase then that would be a different matter.

Another alternative would be to transfer all Council Housing to a single Housing Association in block and end the involvement of Local Government in Social Housing.

[Opinicus]

Have we given this policy our full attention?

Given that there are housing associations in every authority. Wouldn't it be simpler cheaper and quicker to set up a Home Exchange website and let people organise it themselves?

But I suspect that's insufficiently dirigiste and the transaction costs will be a bail out for the estate agency industry for whom we weep.

[Tom]

A great idea, shame it's utterly impractical.
A much simpler solution would be to let councils and housing associations buy property on the open market and let them out to people who wish to move. The reason for problems in people transfering is because the social housing stock has declined year on year and the number of new council houses and housing association houses being built is at record lows (after 30 years of decline) while demand for social housing has risen in line with soaring house prices and private sector rents.

[Super Blue]

Another great, simple, radical solution.

[Conand]

@ Tom @ 08:54

I disagree. Under our plan social housing stock will move with people rather than the other way round.

I think this is a good idea. These kind of things are why I got involved with politics.
I'm worried that the Sun Online seems to be misreporting this announcement:

'Tenants will even have the right to force private landlords to sell their home and buy another where they want to live.'

I don't think Grant says that anywhere. The commentors on their website seem a bit nonplussed by this and what is essentially a great policy is being lost.

>>>> CCHQ TEAM <<<<

If the Sun are reporting this incorrectly, please please contact them. I don't want 'Stage II' to get lost in confusion!! :)

[Pete L]

This smacks of another headline grabbing idea that will result in 'egg on the face' for Grant Shapps and the Tory party unless he runs it by representatives from the very Local Authorities he is so critical of.
The above entries have already spotted a few problems and I believe Local Government Housing Officers will spot more.
For each family you provide with an escape route, you create another empty house is a degenerating ghetto.
Try tackling the problem rather than finding a way out for good tenants to leave bad areas, or this will be the NHS Passport debacle all over again.

[Tim]

If you have a spare minute please vote in this on-line poll, and spread the word!
http://www.thisislondon.co.uk/standard/poll/poll-36517-details/ques-36871-id/Lite+poll%3A+nasty+party/poll.do

[Thatcherite88]

It seems a good idea - I particularly like a measure that gets brief mention here - equity rewards for good tenants. Maybe this policy will stop areas being degenerated by a bunch of 'chavs' moving near to them, getting drunk every night and endeavoring to make resident's lives hell.

To the policy at large, it seems a decent proposal and should be a vote winner. It may also serve to rebut the idea that we are a party of the rich.

[oddball]

Excellent idea!! At least Shapps is trying to address a nasty problem.

Credit to they guy - like his style - he is actually trying to improve matters. Makes a change from the normal platitudes. He is not frightened of criticism and I admire that in a politician.

He also doesnt claim a second home allowance, I like that too!

[Tim Leunig]

I am the author of the original Policy Exchange paper setting out this policy. Although I make no claim to speak for Grant or the Tories, the original paper does offer answers some of the questions raised here.

1) LAs and HAs could only refuse to buy a property if they could show that it was disproportionately expensive to maintain - thatched cottages, houses on small islands, that sort of thing. This is akin to the standard "is it eligible for a standard mortgage" criteria. If it needs work to bring it up to standard, then the tenant would only be able to move there is the purchase cost plus refurb cost did not exceed the value of their current house, which would be sold.

2) LAs and HAs could buy the property that their tenant no longer wishes to live in, and rent it out commercially.

3) There are no proceeds to ring-fence - the money raised by selling one house would be used to buy another. It moves the stock of social housing, but neither adds to it, nor subtracts it.

4) A tenant would be able to move from Gateshead to Hammersmith if they could find a H property worth no more than their G property (and vice versa).

5) If the property cannot attract a buyer, you cannot move - just like an owner occupier.

6) The purchase of leasehold properties would depend on the service charges.

7) The vast majority of moves are likely to be local - like an old man I met recently who wanted to move from his flat to a ground floor flat, as he found the stairs difficult.

8) You could move to a house up to a suitable size - so the odd tenant of a £1.2m flat cannot buy a castle.

9) A similar scheme in York (SAVE - google it if you are interested) led to more mixed communities.

10) The exchange websites have a very poor record of success - in essence barter does not work.

11) If Manchester owns a house in Cornwall, it should subcontract the maintenance to an LA or HA in Cornwall. But most private sector moves are local, so this would rarely if ever be a problem.

12) The Sun does appear to have misreported it.

13) My recollection is that LAs opposed right to buy, but their opposition did not stop the policy being politically successful.

[Bruno Prior]

Right-to-buy was about moving people from the public sector to the private sector.

Right-to-move is about keeping people in the public sector, but trying to pretend that the public sector can be made to offer similar flexibility and freedoms to the market.

I'd rather social-housing was as inflexible as possible, to give people the incentives to get out of it. It should be a minimal safety-net, not a public service.

Better still, change the welfare system to a Basic Income (BI) including an allowance for minimal rent, place an obligation on councils to provide housing to minimal standards at costs linked to the BI to people falling into tightly-controlled eligibility criteria (with costs recovered from local taxation), and leave it to people and markets to choose what to do about their accommodation.

Typical Cameroon/Policy Exchange idea. It has little in common, other than the name, with Right-to-buy. Tim, you're much better at transport; I'd stick to that, if I were you.

[paranoidman]

having read Tim Leuing's comments the scheme makes more sense - however I still think it's flakey

It's taking money out of social housing as you can only buy properties worth less than the one you leave - thanks to the transaction costs. Stick some central govt match funding in to help cover those costs and even maybe get a better property and you have a cheaper way of improving the social housing stock

I'd also be concerned about the impact on areas like Blackpool which have significant levels of economic inactivity - a large number of hotels there were converted into flats and filled with people from around the country on disability benefits after landlords placed adverts in the national press. If you are planning to not work for the rest of your life then why not be unemployed near the seaside

the number of social problems has grown significantly since this happened and with housing prices so low there I can see social housing being sucked from cities like manchester and leeds, where there is a chance of employment to failing resorts that are struggling as long term unemployed take up this opportunity

[Opinicus]

@Tim Leunig

I wasn't suggesting a bartering process through the website but a website where social housing tenants could register their wish to move and where tenants could go to choose a new property.
Essentially, it is prioritising the existing tenants transfer over the housing waiting lists. This is one of the greatest concerns of c2de Tories in my area i.e. the respectable white working class.
People, who must be housed because the Housing Act says they must, can be slotted in anywhere not just in the first Housing Authority they pitch up in off the boat train. People in existing social housing can have first right to transfer to a better house or a better area.
Your scheme simply churns money and wastes it on professional fees.

[Tim Leunig]

Opinicus: I am happy to support your scheme as well (and it is also in the Tory paper), but don't overstate the costs of this scheme. The evidence shows that it is under £1000 a house - which is small beer if it leads to more people being in work, for example, or raises school results. And for that reason the amount of money that is "sucked out" of social housing is trivially small.

[Ross Warren]

"To the policy at large, it seems a decent proposal and should be a vote winner. It may also serve to rebut the idea that we are a party of the rich."

It is a policy which continues the Tory tradition of support for the worthy poor. Assured Tenancy is an extremely valuable benefit . The people who this is aimed at may well not be rich, but are comfortable. It is a reward for good tenants.
It will also only be taken up by a those who are determined. In short it will favour doers. It will be a popular and valued by those who are placed to take advantage of it. I believe its a good policy and importantly it is a Conservative policy. We should keep this away from Labour who might well wish to steal our thunder.

[paranoidman]

the major reason the scheme will fail is that it deosn't take account of the debt attached to the properties and most social housing carries some debt - I'd be interested to see the views of the council of mortgage lenders on this. They've effectively blocked right to buy being extended to RSLs by pointing out their expectation of a return on a property and their concern that a loss of stock through RTB would hamper an RSLs ability to pay

you'll have landlords having to pay off debt on properties they no longer own and those costs will have to be transferred to the new property, even if it's considerably cheaper. This could leave landlords stuck with properties that are unlettable because they have to charge more than the local market rent

[Peter North]

Tory socialism

[Tim Leunig]

Paranoidman: the value of the new house would be the same as the old, so the debt would move with it, just like an owner occupier porting a mortgage. If the new property is considerably cheaper, the landlord gains the difference, so that the mortgage can be reduced.

[paranoidman]

the debts HAs have with lenders contain penalty clauses if they're paid off early. as a result the mortgage payment as an element of rent will have to move with the property

and again - the key view on this is that of the lender and whether they see increased risk in having their lending attached to unknown properties in unknown areas.

to satisfy the lenders there will have to be strict regulations related to the condition of the property the debt is moved to and they will also be concerned if their debt is moved to a property in an area of lower demand

without those safeguards this will increase the cost of lending for new social housing development

[The Bishop Swine]

" This could leave landlords stuck with properties that are unlettable because they have to charge more than the local market rent"

A very good point, most especially as in most cases Social Housing rents as very much lower than privately owned properties.
This would indeed be a very popular policy with those few Tenants positioned to take advantage of it, but if you are right ( and I believe you are) then it would be a disaster for the housing associations.

[Tim Leunig]

As paranoidman says, it is important that the new properties are worth as much as the old. But since HAs tend to keep them for a long time, so long as the rent is coming in, and so long as the property could be relet, the particular property is not a big issue.

Why would landlords be stuck with properties that are unlettable?

[The Bishop Swine]

"Why would landlords be stuck with properties that are unlettable? "

Because the unpleasant properties in the sink estates will not be attractive to possible tenants. Given the choice most people would wish to let a good attractive property in a decent private estate. Those moving into poor properties will be unable to use the right to move because their property will have a low commercial value. As their property is not valuable their option to move will be as now limited.

[paranoidman]

"Why would landlords be stuck with properties that are unlettable?"

a HA rent has to cover the borrowing and the maintennance costs. the borrowing costs will be related to the build of the previous property, not the cost of the current property

tenants may choose to make moves from more to less valuable housing. My example of a manchester tenant deciding to move to blackpool for example. Market rents are lower in blackpool than in some areas of manchester yet this property will be stuck with manchester costs in terms of debt

management costs will also be more expensive - if you contract out to a local HA you won't get their management service at cost you'll get it at cost plus a margin for administration

if the landlord is to get this property let then they either transfer these additional costs to housing benefit and only let to the economically inactive or they take a loss on the property. should this occur often lenders will take note and see HA lending as riskier

this may seem like an extreme example but it's not - people aren't always as rational as we'd like to believe and can make seemingly perverse decisions. The changes to Blackpool's rented housing market since its decline as a resort are instructive - 1000's of people on benefits from around the country have "retired" there in poor housing stock already making it much harder to regenerate the area. This sort of scheme would add to that kind of move

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