My Lords, I congratulate the noble Lord, Lord Kerslake, on his excellent maiden speech, with which I agree. It is a great privilege to take part in today’s debate on the gracious Speech. Having just been re-elected to South Somerset District Council, local government continues to be very dear to my heart, and the provision of adequate, decent and affordable housing is a key role of local authorities. As has already been said, there is a chronic housing shortage in the country today. This has built up over a number of years and is now critical.
I understand the Prime Minister’s wish to increase home ownership and extend the right to buy to housing association tenants, but I fear his promise has serious flaws and will do nothing to alleviate the housing shortage. This view is shared by housing associations and a number of organisations concerned with the housing market.
The Chartered Institute of Housing believes that extending the right to buy to housing associations will not tackle the housing crisis and could make things worse for those on lower incomes already struggling to access a decent home at a price they can afford. It would have an impact on both housing associations and on local authorities, as councils would have to sell off their most valuable homes to fund replacements, as has already been said. The Government have said that replacements for both housing association and council homes sold under the extended scheme would be built in the same area, but this will be heavily dependent on land availability and will therefore be extremely challenging in some inner city and rural areas.
I represent a very rural area where providing affordable housing is particularly challenging. There are examples of communities working to provide affordable housing under the rural exception scheme, allowing green-belt land to be used and retained in perpetuity for people with local connections. The right-to-buy plan would seem to be entirely incompatible with this scheme. New occupants of rural exception schemes could be guaranteed a financial windfall and, at the same time, affordable homes would be lost to the community. Right to buy has seen many homes in rural and coastal communities sold and often not replaced.
In response to a letter from a constituent writing about affordable homes, the Prime Minister said:
“The fine details of this proposal have yet to be worked out but I have certainly taken on board your desire to ensure that affordable developments in rural communities of less than 3,000 people continue to be exempt from the Right to Buy”.
Right to acquire does not currently apply to rural communities with fewer than 3,000 homes. Right to buy is also currently not applied to sheltered, supported or adapted housing. Could the Minister give reassurances that rural communities will indeed be exempt from this extension to housing association tenants and provide clarity on the continuation of this practice? Similarly, the National Housing Federation has said:
“We fully support the aspiration of homeownership, but this policy does nothing for the 11 million private renters and three million adult children living at home with their parents. If there is £22.5 billion of public money available for housing, we should use it to build homes the next generation needs, not just gift it to the lucky few already housed in housing association homes”.
It goes on:
“An extension to the Right to Buy would mean that housing associations are working to keep pace with replacements rather than building homes for the millions stuck on waiting lists”.
These views are also shared by the Local Government Association.
Funding apart, it is a significant challenge to replace homes sold due to the constraints of acquiring land and planning consent. Historically, right to buy has led to the replacement of one home for every 10 sold. While the proposed Bill signals changes to freeing up brownfield sites and planning, there will always be a time delay in any replacement.
Many homes sold under right to buy are subsequently sold on, and often become private rentals at a higher rent than the previous affordable one. These properties are frequently poorly maintained and the additional rent often funded through housing benefit. This is a double whammy for the taxpayer, who is providing two subsidies, one through the discounted purchase price and the other through housing benefit. This cannot be right.