Spotted by SW in The Daily Telegraph:
A new era of “Gerrymandering” will be heralded by ministers today as part of a fundamental shake-up of Government moves to create a new generation of Home-Owner-Ists at the taxpayers' expense.
The old “right-to-buy” rules will be extended, the Coalition will announce, so that social housing tenants – those who are in housing association homes as well as those in council houses - will be offered juicy taxpayer-funded discounts after five years of renting them.
In return local associations will be allowed to plough the money they receive back into providing new homes - unless prevented by the Localism Bill, of course - which will in turn be sold off at undervalue, thus ensuring an ever dwindling stock of social housing. The move is part of a package of measures designed to plough on merrily with Labour's Home-Owner-Ist policies. To try and drive a further wedge between the 'better off poor' and those at the bottom of the heap, new council house tenants will no longer be given a council house for life, as these will be required to sell off at undervalue.
Instead, they will get a flexible tenure contract for as little as two years and be given six months notice if an assessment reveals they no longer need the house. With global warming and so on, tenants who haven't found work will be happy to make do with a tent; and tenants who have found work will have a choice: buy the place you live in or be evicted.
Because of the new flexible tenures it is crucial to “right-to-buy” that people are allowed to accrue time even if people have moved home.
Currently some tenants in housing association homes do not get full “right-to-buy” rights for a variety of reasons, mainly because the taxpayer-funded Housing Associations quite enjoy the rush of power that being a large scale landlord gives them. Ministers will today say to housing associations, if you build a home using the new Flexible Rent – that is up to 80 per cent of the market rent - then you must also offer the right to buy.
Grant Shapps, the Housing Minister said last night:
“You will acquire the right to buy at a discount from housing associations. The present system is far too simple. Councils can only charge more rent if they use the extra cash to build more affordable homes to sell off at undervalue to Home-Owner-Ists.
Even in these tough times this Government is determined to find ways to exploit the hopes and dreams of hard working people who want to become Home-Owner-Ists for political gain. The UK banking system also needs to find fresh blood to tap into, and we're offering them the necks of the 'better off poor'. That's why we'll build in ways to help people move from renting to home ownership when the time is right. This will be a continuation of the failed housing policies of the last forty years.”
David Cameron is determined to push ahead with the plans despite concerns from some Liberal Democrat MPs about the affect they will have. But Tory ministers pointed out that Labour had also fundamentally failed those most in need and created a housing waiting list of five million people, so what they were doing was no worse.
Some local authorities will use their new powers to decide who goes on their council house waiting lists to give priority to those who are low-paid and struggling to get a home, rather than automatically allow the jobless and those on benefits to be housed first. The changes to the way councils allocate social housing are likely to be the most controversial. They will be able to decide who qualifies for social housing in their area - taking away the “unrealistic” requirement to accept applications from anyone.
Landlords will now be able to raise funds to build more social housing for those who need it – on top of the £4.5 billion the Government will invest in building up to 155,000 new affordable homes. But under the Localism Bill, it is highly unlikely that any of these schemes will go ahead.
Monday, 22 November 2010
"Ministers to extend 'right-to-buy' policy"
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12 comments:
I had a chat with my new HOist colleagues today.
They really couldn't get their head around me not caring all that much about being priced out.
But don't you think it would be nicet to own your own place Steve?" One of them quizzed.
"Well yeah, just like it'd be nice to own a new Ferrari, I don't lose any sleep over it." I replied.
"Come on, that's a bit different."
"Well not really, I'd need a deposit for about the cost of a new Ferrari to buy the place you bought in '97."
"But you'd get a small studio with a £20k deposit."
So the idea they were advancing was that it would be better to get up to my eyeballs in debt to own a pokey little room in a big house with a shared bathroom than to pay £400 a month to just rent one I can vacate at the drop of a hat if better job offer comes up.
These people are nuts.
SL, are you in Brighton now?
That £20k deposit is bitter. After I got divorced last time in 1995, I bought myself a lovely flat in East London for £33k cash. I didn't even bother having a survey done, I reckoned no way could it fall in value.
Yeah, south coasting it. Can't wait for the summer!
At the moment, I can see the attraction of renting. Unless you are one of those people who likes living on a building site, enjoys DIY or is able to add value to a property by improving it for less than the cost of the improvements, then there isn't much point in owning. What's more, you are delivered from the temptation to get yourself hopelessly into debt.
SL: "So the idea they were advancing was that it would be better to get up to my eyeballs in debt to own a pokey little room in a big house with a shared bathroom than to pay £400 a month to just rent one I can vacate at the drop of a hat if better job offer comes up."
See when you look at like that it sounds bloody marvellous doesn't it. I've found myself wondering recently why we don't just sell up (still at about 62% LTV even with the price crash) and move into larger rented accommodation at a similar monthly cost. Its such a hassle having to fix the house up yourself when in rented its some other mugs responsibility.
B, SW, as it happens, I did sell-to-rent in December 2007, I reckoned that house prices would crash (in which I may have been wrong). It was a bit of a wrench at the time, but after being mugged a couple of hundred yards from my front door, I couldn't stay living there.
The longer we rent, the more I like it, even though with interest rates where they are, our interest no longer covers the whole rent, so we actually have to pay half ourselves (the outrage! As a 'wealthy person' I demand my right to free accommodation!).
For example, we could now up sticks and move to the catchment area of a good school, sure, it's more expensive renting there, but once your kids are in, then they're in and you can move away again once the dust has settled.
Re the post - quite. Sooner or later they'll start on the same right to buy stuff for private landlords - or maybe not, as it'd show up the madness of the scheme.
Re comments. All true, and confirmed from epxperience here at the 'coal face'. Unfortuneately I live in a house I love (and Mrs Lola and all the little lolas love even more -it's where they grew up) in a location to die for. I just couldn't rent it. So I own it. That's 450K sitting doing, well bugger all really.
...oh and PS. The actual building could be run up for about 150K
L, that is a splendid idea - "right to buy at a discount from private landlords". Sauce, goose, gander etc. If it's OK to rob the taxpayer of his assets, why isn't it OK to rob privatised rent collectors?
MW Quite. The idea came to me in one of my more lucind moments. That is the moments between the long periods when I am apoplectic with fury.
"right to buy at a discount from private landlords".
Which is what you effectively had under the pre-Thatcher rent acts. Once a landlord had a "sitting tenant" in his property, its value plummeted and the only person really interested in buying it was the tenant. Some friends of my parents did well out of this. They bought a large house quite cheaply because part of it had been hived off and had an elderly sitting tenant living in it. They didn't mind as the tenant kept an eye on the place when they weren't there and was otherwise no bother and they were quids in when she eventually had to move into a care home.
B, that's a good point.
The reason why UK homeownership levels used to be so much higher than other countries was because landlords got the rough end of the stick vis a vis taxation, rent controls etc; and not because of subsidies to homeownership (such as MIRAS etc).
You can still snap up houses with elderly sitting tenants under pre-88 leases for half of normal selling price, apparently, the discount is smaller the older they are, obviously.
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