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I am delighted that housing association tenants in England are to be given the right to buy with the same discounts available to council tenants. There are 2.5 million housing association tenants in England and for many of them this month’s General Election result will be transformational. They will have the same opportunity as two million council tenants.

However it is not enough to simply change the law, if people’s aspiration (to use the buzzword of the moment) is to be made a reality. In London the level of discount is capped at £103,900 – compared to £77,900 in the rest of England. Those discounts are substantial. But a one bedroom ex council flat in my borough costs £375,000 on the open market. If a couple in such a property were council tenants and had been living there long enough to qualify for the full discount that would cost them £271,100 to buy. For a couple you can usually only get a mortage for two and half times the combined salary. So they would need to be earning £109,000 a year.

My borough, Hammersmith and Fulham, is an extreme example regarding house prices. Up to a point. A two bedroom former council flat in Haringey costs £259,995. So a couple in an equivalent property entitled to a full discount on the market value would need to jointly earn £63,000. This three bedroom maisonette in a (rather ugly) council block in Lambeth costs £310,000. So if that’s a typical example a couple in a Lambeth council flat would need to earn £83,000 a year to exercise their right to buy. This one in Tower Hamlets looks a bit nicer and costs a bit more.

So what is needed is a right to shared ownership. I would start by offering a 10 per cent stake to all council and housing association tenants for free with certain provisos. Firstly they must agree to take responsibility for low level repairs – such as a blocked drain or replacing a broken cooker. A typical household spends £600 a year on repairs and maintenance but the cost to repairs for a social landlord averages £1,000.

Secondly, only those who had not been on Housing Benefit for at least a year would be eligible for the 10 per cent stake. They would also forfeit the stake if evicted for rent arrears or anti social behaviour.

They would then have a right to “staircase up” buying a further share, with discounts proportionate to the right to buy scheme. Their rent and their leaseholder charges (if applicable) would be proportionate. So, for instance, those taking a ten per cent stake would pay 10 per cent of the leaseholder charges and 90 per cent of the rent. They should have a single bill, with a sheet of paper showing the breakdown, making this clear. This would make it easier for them to work out how much rent they save and how much extra leaseholder charges they would incur as a result of buying an extra tranche. At the moment those with shared ownership properties have to pay the full leaseholder service charges – this is quite unfair.

Crucially as well as a right to buy there should be a right to sell. If the resident moves (or dies leaving the stake in the property to a relative) then the council or housing association should have the option to buy back the stake at an independently verified market value. But if they refuse, than the property should be sold on the open market with the proceeds being shared out accordingly. The resident (or heirs) take their share, the social landlord takes theirs.

My expectation is that most of the 4.5 million households in social housing in England would seize the chance to get on the housing ladder.

What about replacement stock? As noted earlier social landlords would save a considerable amount in repairs – rather more than the revenue they would lose in rent. So the current budgeting would be manageable. But I would use funds from the sale of state land to reimburse them the capital lost by giving away 10 per cent stakes. They would have a responsibility to provide replacement stock. So if a housing association had a thousand tenants who took up the 10 per cent offer then the housing association would be obliged to build 100 new homes.

There would be an advantage to the taxpayer as those on Housing Benefit would have an incentive to get jobs (or increase their hours) in order to get off Housing Benefit and to thus have the right to shared ownership.

Of course the offer proposed above could be made a bit more generous or a bit less generous in various ways. But it is important to have clarity and simplicity – qualities sadly lacking in too many of the assorted shared ownership schemes hitherto. One fiddly distortion which discourages people from taking up Shared Ownership is Stamp Duty. Raising the threshold for Stamp Duty would help. (The Labour manifesto suggested it should only apply on properties valued above £300,000, wouldn’t it be rather magnanimous and inclusive to adopt that proposal?)

Is there really the desire for home ownership? Consider this report a couple of years ago from, of all people, Shelter. It says:

“Shelter commissioned focus groups of low to middle income families across England, asking participants about their housing needs and wants for themselves and their children.  Owning a home was not just a preference for these groups, but an expectation: they felt that it ought to be achievable if they were able to work and save up a deposit.

“These low to middle income families strongly resented the “dead money” of renting, and wanted to put their housing costs to good use, building up an asset for their family’s future security. The preferences of the low to middle income families in our focus groups are reflected in wider polling: some 76 per cent of private renters, 43 per cent of social renters and, unsurprisingly, 91 per cent of homeowners would prefer to own a home of their own.

“It’s not hard to understand the popularity of homeownership. As owning a home expanded over the last century, more and more people have grown up in owner occupied homes. Some 64 per cent of today’s private renters spent their teenage years in a home
that their parents owned.8 This experience has a strong bearing on preferences in later life – owning a home is seen as an achievable, desirable, sensible aspiration.”

How would housing associations respond? The scheme I propose would not diminish their asset base. Some housing associations such as Gateway have made genuine efforts to make a success of shared ownership schemes. Of course some of the CEOs in the “sector” have an ideological hostility to home ownership (for others). But why should the enemies of promise be allowed to triumph?

As mentioned at the start in no sense do I mean to be dismissive about what the Government is already planning.  The “rent to buy” scheme for 10,000 new homes will also help.

But to achieve something on the scale of the Thatcherite right to buy would mean putting millions on the home ownership ladder – not thousands, tens of thousands, or hundreds of thousands. That should be the scale of ambition for this Government, and bringing in a right to shared ownership is the way to achieve it.


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