“Our policy should not be determined by what the Tories say but the material needs of millions of people suffering the consequences of the housing crisis.”
By Martin Wicks
In a recent appearance on TV Lisa Nandy said that she agreed with Michael Gove that Right to Buy (RTB) is “sustainable” if every home sold was replaced by a new build. She said that Labour “agrees with the principle” of RTB. From discussion with senior figures we know that the Labour Party leadership is hesitant about committing to ending RTB because they expect the Tories to denounce them as being “opposed to aspiration”.
Everybody has aspirations of one sort or another but RTB was never about aspiration. It was a calculated means of the Tories weaning away electoral support from Labour on council estates. It was designed to mobilise self-interest; what used to be called getting-on, or keeping up with the Joneses.
At the Labour conference in September Lisa told a fringe meeting that the policy of Right to Buy was under review. Who by? Certainly the members haven’t been consulted on agreeing with “the principle” of RTB. As we know at the 2019 and 2021 Labour conferences delegates overwhelmingly for housing resolutions which included ending RTB. At the 2021 conference Lucy Powell (then responsible for housing) said that ending it was the right thing to do and it was what the members wanted.
When we heard that the policy was under review, the Labour Campaign for Council Housing produced a statement calling on Labour to commit to ending RTB. It picks up on Lisa’s phrase from her conference speech that “the idea of a home for life handed on in common ownership to future generations is an idea worth fighting for.” Clearly common ownership ceases when a home is sold under RTB and it becomes a commodity.
Lisa’s comments on TV underline the importance of campaigning for an unequivocal commitment to end RTB. We need to get across the message to the leadership that ending it is a necessary precondition for tackling the housing crisis and it is what the membership want. Our policy should not be determined by what the Tories say but the material needs of millions of people suffering the consequences of the housing crisis.
It is not difficult to challenge the argument on “aspiration”. RTB, which Michael Heseltine called “the sale of the century,” is a gift to the person buying. They are getting the property on the cheap. Yet it has dire social consequences for others because it means one less home for the growing numbers on the waiting list. It also means a loss of rental stream to councils, leaving them with less income to pay for work on their depleted housing stock. An estimated 40% of council homes bought under RTB end up in the private sector. Their much higher rents increase the cost of the housing benefit bill nationally.
There is nothing superior about a home owner over a renter. Not wanting to own a home is not an expression of lack of aspiration. Being unable to afford one is not a sign of ‘failure’. The experience of the pandemic led millions of people to reconsider what is important in their lives. Personal acquisitions do not guarantee contentment. Owning a home is not a guarantee of ‘security’. As the current situation shows, a mortgage can be an albatross around the neck. With interest rates above 6% more people will struggle, as they have to renew their fixed term mortgages. Those people who bought with Help to Buy face a big increase in their annual fee (1.75% of the equity loan from the government) which increases annually by CPI+2%. So next April it should increase by 13.1%!
Historically council housing can be said to have facilitated home ownership for those who wanted it. The reasonable rents enabled tenants to save up a deposit, buy a home on the market, and hand the keys back to the council for a new tenant off the waiting list.
RTB was one of the main causes of the housing crisis. As a result of its continuation in England there are now less than 1.6 million council homes left. The acute shortage of council housing, in combination with house price inflation (the price of a median and lower quartile new build home is more than 10 times earnings) has forced millions of people into the insecure, expensive and often poor quality private rented sector. There are 4.8 million households in England in the PRS.
One for one replacement?
One for one replacement will not happen. Even if councils were allowed to keep 100% of their receipts the cost of building new homes is far higher than receipts from the sale of older council homes. The difference between them has to be covered from the housing revenue account; essentially existing council tenants’ rent.
In the last financial year more than 10,000 council homes were sold under RTB. Add around 2,000 demolished and councils have to build at least 12,000 just to stop the loss of homes. In England that many have not been built since 1990. Since the discount on sales was increased, 107,000 homes have been sold and 26,000 demolished. Only 42,000 homes have been built or bought, to replace them.
What can you do to help?
- Sign the statement yourself and encourage others to.
- Get your branch and/or CLP to support it.
- If you are a councillor get your Labour council group to support it.
- Ask your trade union organisation to sign it.
RTB has been ended both in Scotland and Wales. It is a cost-free policy. It will mean that, for the first time since its introduction, new homes built will increase the stock numbers and open up the prospect of reducing the number of households on the waiting lists. Combined with funding for new build programmes it can liberate the rising generation from the PRS. It will give them the real security of a social rent council home with a secure tenure.