Vir Cantium

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Tag Archives: right to buy

Tackling the Affordable Housing Paradox

The National Housing Federation has said that the downturn in the housing market has allowed housing associations to buy up unsold properties. (Listen to the BBC piece here.)

However, don’t let that give you the idea that the associations have been struggling to acquire property up to now. One of my roles in the past was overseeing the sale of various sites from a large property portfolio. More often than not, at least in recent years, the housing associations (H.A.s) have been able to outbid private developers on many of the sites that go for housing. When an H.A. is the clear highest bidder then it is difficult to justify going for a lower private offer and still demonstrate that we are achieving best value.

Now this is not to criticise H.A.s, who are only doing their job, but one has to wonder to what extent the H.A.s, with their public (or publicly-backed) finance have themselves contributed to the boom in property prices until recently.

While there is undoubtedly unmet housing demand (a more accurate term than housing “need”, I think), it is wrong to assume that all those potential buyers and (often by necessity) renters want to be in social housing, for too often the terms “affordable” and “social” are wrongly used interchangeably in debates around housing. “Affordable” can include shared equity schemes, but also simply lower cost starter homes. It does seem a raw deal for those who are working hard and trying to save for a home that they can be effectively outbid by housing associations who benefit from the public finance that, certainly in the absence of MIRAS and any meaningful rolling back of stamp duty, they themselves cannot match.

It would also be an interesting “what-if” exercise to see how many currently empty sites being land-banked by developers (and in some cases now being off-loaded) would have been built on had requirements to include minimum levels of affordable/social housing not pushed those sites onto the wrong side of financial viability. How much further could the wider housing shortage have been eased, ironically, without the state intervention that was intended to achieve just that?

It’s hard to see how any of this can be helped by the HA’s shifting up a gear in expanding their portfolios by buying up not just sites but built properties, or how any boom in public house building is going to help ease inflation in construction prices.

So just as the right-to-buy has been (unfairly) criticised for reducing public housing stock, are the housing associations now denying future first-time buyers the opportunity, come the upturn in the economy, to own their own home? Of course, there is one way to ensure this doesn’t happen, and it’s an anathema to the left (so there must be something good in it) … introducing the right-to-buy for all housing association tenants.