The rumours were true; Boris Johnson has announced that he plans to build on Margaret Thatcher's legacy by expanding the controversial right-to-buy policy to millions more people.
The Prime Minister wants those who rent from housing associations to be able to buy them at a reduced price.
Depending on how long they have lived there, tenants can obtain up to 70% off the market price under the existing policy.
For those who wish to buy via a housing association, however, the scheme is significantly more restrictive. Housing Association Magazine’s Joe Bradbury discusses:
Right-to-buy is riddled with inconsistencies and hypocrisies
A brief overview
Right to buy is a scheme that allows many tenants in safe social housing to buy their property at a significantly discounted price. However, with home prices in the United Kingdom fluctuating and many older council estates being demolished to make way for newer construction, the number of compulsory purchase orders on council estates has never been higher.
Local governments are bound by law to compensate those who have been displaced as a result of future development plans; nevertheless, it has lately come to light that many homeowners are being forced to accept significantly less than market value.
The scheme received widespread praise when it was first introduced in the 1980s, but there is now a stronger argument against it, claiming that not only has it aided soaring property prices through deferred transaction agreements, but it has also resulted in a large number of council-owned properties being located in less desirable areas with fewer employment opportunities, where people are more hesitant to buy. As a result, persons who live in social housing in these neighbourhoods have become increasingly stereotyped and stigmatised.
Since 1980, more than 2 million people have purchased a home from the British stock of social housing. Depending on whatever side of the fence you are on, this is perceived as both good and terrible news.
On the plus side, millions of people have been able to take their first cautious steps onto the property ladder as a result of it. However, it has also decimated the social housing stock, resulting in a housing crisis and skyrocketing property prices, throwing the housing market into disarray.
So, what has the right-to-buy scheme actually done for Britain over its rocky 40 year history?
It increased the number of homeowners
Right-to-buy undeniably encouraged more people to buy their homes in the United Kingdom in the 1980s.
And many did.
Home-ownership surged dramatically in the 1980s, indicating that it worked for a time! Now however, as property prices rise out of reach for many first-time buyers, we are witnessing a paradigm shift in this.
It now appears that the right-to-buy had the opposite effect of what was originally intended. Fewer and fewer people are able to buy a home.
It increased the number of people renting
The goal of home-ownership has tragically become a pipedream for many, as potential first-time buyers struggle to save enough money for a deposit or earn enough to meet the mortgage.
Renting is the only other choice for people who want to leave their parents' house, which has resulted in a significant increase in the buy-to-let sector of the property market.
It worsened the housing shortage
There is clearly a lack of council-owned social housing in the United Kingdom, which has been substituted by privately owned "affordable housing," which can be a contradiction in terms at times.
For many, it appears that the right-to-buy scheme was enormously beneficial in the near run. However, as time has passed, it has produced new concerns that have only been discovered with the benefit of hindsight.
These problems have thrown the housing market into chaos, implying that what worked in the 1980s is unlikely to function now.
Although the strategy aided its primary goal of promoting home ownership in the United Kingdom, it has eventually led in an increase in demand for private rental properties, which is the exact opposite of what it was designed to do.
Increased investment in the buy-to-let market has driven prices out of reach of many first-time purchasers, resulting in a crisis that is self-perpetuating. A place to call home should not be an unattainable goal for anyone; it is a basic human right.
Finally, right-to-buy is riddled with inconsistencies and hypocrisies, undermining and devaluing what was previously thought to be a wonderful notion. Many flaws must be addressed promptly in order for the right-to-buy system to become a beneficial force in our society, and it must be rebranded if it is to reclaim the faith of an aggrieved property market still licking its wounds.
Joe Bradbury is Digital Editor of Housing Association magazine