Inside Housing – Insight – Right to purchase for social landlords: the main challenges of extending the policy

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A cynic can look at the schedule of reports on the right to buy extension and say it is proposed as the winner of the vote ahead of Thursday’s local elections.

The right to buy was undoubtedly popular with social housing tenants under Mrs Thatcher and the fact that 1.7 million tenants have used it since its inception shows there was a demand for it.

But is this always the case?

In an environment where the cost of living crisis hits society in the pockets, and disproportionately affects HLMs, do these tenants have the cash to buy back their homes, even with a discount?

Many of those living in social housing barely have enough to maintain heating or feed themselves.

A housing association source said: “Even with a significant discount, I don’t think people will be able to buy or take on all the responsibilities of the property.

“I don’t think the government appreciates how low people’s incomes are in social housing.

The briefing in The telegraph suggested the government consider allowing tenants to use their housing benefit income to secure mortgages. One wonders how exactly this will work and how a benefit that only covers the lowest third of the rents will be accepted by the banks.

Mr Lloyd thinks it will play out differently than it did in the 1980s and 1990s and said adoption will not be the same or as easy.

He explains: “First, the population of people in social housing is very different.

“After decades of residualization, you no longer have those kind of classic 80s wannabe families desperate to own and this is just an opportunity for them to buy the house they grew up in.

“Allocation policies and the scarcity of social housing mean that many more vulnerable and poor people unfortunately live in social housing than [they] do then.

He adds that far fewer people will be able to use the purchase right, especially since house prices are much higher than they were then.

“So even with the same level of discounts, buying those homes will still be very expensive,” Lloyd says.

There is already an indication that turnout will not be as large as the government anticipates.

Although little known, some housing association tenants can buy their homes at a reduced price through the right to own or social housing purchase programs.

The right to own scheme allows tenants who live in properties which were built after 1997 under government funded affordable housing schemes or transferred to a housing association by a council after that date to purchase their house with a discount of up to £16,000.

Social HomeBuy is indeed an option for some housing association or city council tenants to purchase their own condominium unit. Tenants of municipalities or housing associations who have voluntarily joined the scheme can buy part of their accommodation and pay rental income on the rest.

However, participation in these two programs has been low.

Since 2006-2007, only 9,671 housing association tenants have taken the right to acquire route. That’s down, with the number of tenants using it in 2020-21 reaching 777, down from 2,080 in 2018-19.

The number of people using Social HomeBuy is even lower, with 691 tenants from housing associations and municipalities using the program since 2006.

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