Did you see this article from the Observer about landlords ‘cashing in’ on the right to buy over the weekend?
It is based on a report, From Right to Buy to Buy to Let, compiled by Tom Copley, a Labour London assembly member, from responses to freedom of information requests.
This shows that:
- at least 36% of all homes sold by councils across London under the buy to let law are now let by private landlords
- substantial numbers of these are being let to tenants who are now supported by housing benefit, while
- many would-be council tenants have now been forced into the private rented sector because of the dwindling supply of council homes
The result of this is that we, the taxpayers, have paid and are paying, several times over.
- We paid for the original properties to be built
- We therefore effectively subsidised the council house tenants who bought them at an undervalue,
- We (or rather the public sector) no longer gets the benefit of rent from the properties which our taxes helped to build, and
- Now we are paying, through housing benefit, higher rents to private landlords.
The report says that families on benefit claim claim as much as £100 a week – £5,200 a year – more in housing benefit than council tenants in the same area. Goodness knows how much money has been lost to the taxpayer through this exercise.
Let me come right out into the open here. I don’t agree with selling off publicly owned residential property to the private sector. I never have done.
I don’t blame council tenants for buying the properties when they were offered to them – I would probably have done the same in their place.
I don’t blame buy to let landlords for buying them from the original owners and renting them out at a market rent. Thats business, and they are at least making accommodation available for people.
But please explain to me why it is fair and right that someone lucky enough to have subsidised council housing in the first place, should then be given the opportunity to buy this property at an undervalue. Often a massive undervalue. When everyone else has to pay full price.
And why it is right that property built with OUR MONEY should be sold off at an undervalue and taken forever out of the public sector. With no funding being made available to councils to build new houses to replace those sold.
Leaving councils with a statutory duty to house the homeless in priority need, but nowhere to put them.
The report is written with particular reference to London (Tom Copley being a London Assembly member) and London has perhaps has suffered the most and has the biggest housing problems. As the report says
If there is insufficient housing for those on low-incomes – the key workers that keep the city ticking – it will undermine London’s long-term economic competitiveness.
These are the recommendations made in the report:
- The government should introduce mandatory covenants on all Right to Buy properties that stipulate that the home cannot be let through the private rented sector
- The system of discounts should be abolished
- A new system should be introduced whereby local authorities retain an equity stake in any home sold
- Local authorities should have a ‘right not to sell’ council housing if this can be justified
- Newly built council housing should be exempted from the Right to Buy if the borough wishes them to be
- Local authorities should have a right of first refusal to buy the former council property before the owner seeks to sell it on the open market
- All new homes built through Right to Buy receipts should mirror the rent, size and tenure specifications of the home lost by the council through this policy
- Local authorities should only be allowed to sell the leasehold of a property and not the freehold.
This all sounds fairly sensible to me. What do you think?
You can read the report online here.