Cuts to 'Right to Buy' have kicked away the housing ladder for many, say Wilson and Sharma
22nd September 2008
The Government was today criticised by Reading East MP, Rob Wilson, and Prospective Parliamentary Candidate for Reading West, Alok Sharma, for its cuts to Council tenants’ rights to buy their home.
New figures reveal how Right to Buy discounts have plummeted thanks to Whitehall cuts. As a result, even before the credit crunch, the opportunity for social tenants to live in their own home has been denied to an increasing number of people on lower incomes.
The Right to Buy gives council tenants the right to purchase their home or flat, with a discount to the sale price to make it easier to get onto the housing ladder. An estimated 2.5 million social tenants have benefited from the Right to Buy since 1980.
- Plummeting value of discounts: New figures from Parliamentary Questions have revealed that since 1998, the average Right to Buy discount in England has risen only from £22,880 to £25,340. As a result, the average discount as a percentage of the market value has plummeted from 50% of the house price to 24%. In the South East region, this works out as a fall from 50 per cent (or £29,780) to 26 per cent (£36,890)
- Savage Labour cuts to the Right to Buy: Labour Ministers have presided over a series of different cuts to the Right to Buy. Government research warned in 2003 that the cuts would hit the “affordability of the purchase” and would become “more pronounced with time”.
- Failure of Labour’s Social Homebuy: The Government has introduced a rival scheme – “Social Homebuy” – to allow social tenants to own or part-own their home. It was supposed to help 5,000 households a year. Yet there have been only a derisory 235 sales have taken place in the last two years. This is since the complex scheme is voluntary for housing associations and councils to offer to their tenants. Only a handful of bodies actually offer it.
- Improving the state of neighbourhoods: The Right to Buy allows tenants to get onto the housing ladder, frees up a receipt to invest in new housing, and creates mixed communities in council estates. Government research has advised that “the policy enabled many households to become owner-occupiers who would not otherwise been able to do so”, with a “positive influence in maintaining mixed communities”.
Rob Wilson MP commented, “These new figures expose how unfair Labour has been, kicking away the housing ladder, reducing opportunity and making it harder for social tenants across my constituency to own their home. The Right to Buy not only provides a vital boost to home ownership for those who aren’t well off, it also improves the state of neighbourhoods by giving people a financial stake in it. It is little wonder that social mobility has gone backwards in the past 11 years.”
Alok Sharma added, “The Government’s housing policy has been a failure, and the Labour Government is making it worse by the day. Conservatives believe more needs to be done to help social tenants own or part-own their home and it is no good Gordon Brown talking the talk about social justice and then refusing to walk the walk. Earlier this year Labour hurt 5.3 million of the lowest paid people in the country by abolishing the 10 pence tax rate – the cuts to Council tenants’ rights to buy their home is just another example of Labour's real disregard for people who are aspiring, through their hard work, to do better for themselves and their families.”