Government urged to use Right to Buy to incentivise BTL landlords to sell to renters



A major new Centre for Policy Studies paper, published today, welcomes the government’s reported commitment to restoring the Right to Buy to the two million housing association households currently denied a chance to own.

The paper, by former No 10 housing advisor Alex Morton, welcomes the government’s commitment to extending home ownership. But it argues that it should go further than just extending the existing Right to Buy by revamping it in the form of a new Right to Own.

Under the proposal, tenants would obtain a mortgage worth 60% of the value of their home – which would be paid off in payments that rise at the same rates as social rents do each year. Like any other buyer, once this ends the property is owned outright however, effectively at a 40% discount, mirroring the Right to Buy discount but at a lower rate. In an emergency such as a loss of employment, the tenant would be able to access the equity they had built up, providing a cushion for them.

In other words, today’s proposal would provide tenants greater security, with every rental payment increasing the tenant’s share of ownership – but still leaving them better protected in the event of financial shocks or unexpected costs.

The paper shows how the revenue from these sales, plus the sale of high-value council homes as they become vacant, could be used to fund the construction of a new wave of affordable social housing – expanding home ownership and the housing stock at the same time.

Morton, head of policy at the Centre for Policy Studies, said: “The Right to Buy was one of the most transformative policies of the 20th century, moving millions of people into home ownership. Many of the arguments made against the policy since do not stack up. The government would be right to extend the policy to housing associations to take the opportunity to place greater ownership at the heart of its levelling up agenda, and deliver on the commitments made in the 2015 and 2019 Conservative manifestos.

“Longer-term, the government can not only revive the Right to Buy but fully reinvent it for the 21st century by implementing a Right to Own. This would put rocket boosters under home ownership rates whilst protecting tenants and the state coffers.”

Robert Colvile, director of the Centre for Policy Studies, added: “The government’s commitment to home ownership, and to the Right to Buy, is hugely welcome. Our report argues that restoring the Right to Buy to housing association tenants, as widely reported, will be hugely welcome – and demolishes many of the left-wing myths surrounding the Right to Buy.

“However, we also urge the Government to go further in boosting ownership among tenants of all tenures, for example by turning the existing Right to Buy into a new Right to Own, and incentivising private sector landlords to sell to their tenants, as proposed in previous CPS work.”

 

Comments 2

  1. if someone can get this to Boris or their Conservative MP, or Labour MP to call Boris’s bluff. I’ve asked Boris on Twitter but understandably got no reply.
    I’m ready right now, my tenant ready right now to use their Housing Element HE (Housing Benefit) of Universal Credit to buy a house.
    They need the Housing Element part to make up the affordability to qualify for the mortgage. As we know lenders won’t take this into account. I think rightly so as the Govt & DWP has a proven track record of stopping peoples benefits just like that for maybe missing an appointment, or changing the rules retrospectively so u then stuffed for the next 10 years.

    But if Boris is serious, I’m ready, my tenant is ready, they’ve been with me about 14 years, been in their home about 10 years, I’m gonna’ pay their deposit for them by way of returning a years rent which hopefully may comply with tax rules as some on here pointed out.

    So Boris, come on, get the lender to allow the HE & u can put this all over the Media that your words are a success.
    And u get rid of a Private Landlord-Triple Bonus for u along with one person buying & proving your scheme will work.

  2. I wrote a critique, below, of the idea of right to buy in the PRS when the CPS first suggested it. Prior to that they used to publish my articles, but Robert Colville, the editor in chief appeared furious about my critique – he had been very excited that Boris Johnson had picked up on the stupid policy, and Colville had a go at me on Twitter – something along the lines of me deliberately misunderstanding the policy. Needless to say, I got cancelled and they wouldn’t publish my work after that, despite saying they welcome opposing views, the exchange of opinions etc. As you will see in my article, there are loads of arguments against this – some of which also apply to the right to buy in the social sector.

    https://www.conservativehome.com/localgovernment/2020/11/rosalind-beck-punishing-private-landlords-is-a-flawed-method-to-bring-about-generation-buy.html

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