Complete Home-Owner-Ist disconnect

The Evening Standard (h/t SBC at HPC) kicks off with a fair summary of the position:

 

More than 3,600 former council flats in Westminster, bought under the Right to Buy scheme, are now in the hands of private landlords, transforming many council estates into buy-to-let goldmines, the latest figures show. Ironically, private landlords are now making huge profits by renting former council flats back to the council to house its homeless on housing benefits. Westminster has been a champion of Right to Buy and has sold nearly half of its housing stock since the Eighties. Tenants who exercised their Right to Buy and then sold up often profited handsomely because of booming property prices in the borough, which includes some of the capital's most expensive postcodes. Westminster has sold more than 9,000 houses and flats and expects to sell hundreds more during the next three years following the Government's quadrupling of the maximum discount available to qualifying tenants to £75,000. Properties are commonly rented out for more than £500 per week, over four times the average council flat rent. Owners, whether buy-to-let investors or former tenants, are free to rent out properties. But concern about profiteering landlords and housing benefit fraud has prompted a council and government crackdown. Hackney Council has decided to introduce a licensing system for private landlords (the first such regulation in London)...

 

Then come the fatuous comments from the Homey cheerleaders:

... while housing minister Grant Shapps wants to make sub-letting of council homes illegal. (1)

... Councillor Jonathan Glanz, housing spokesman, said: "Westminster supports the government's Right to Buy scheme as it enables those who can afford it to secure a foot on the property ladder. (2) The revenue from each property is reinvested to provide another much needed affordable home in Westminster." (3)

 

1) I completely agree, let's make it illegal. But there is not the blindest bit of economic or moral difference between Mr A who acquired his council flat at a massive discount a few years ago, is paying £100 a week mortgage interest and renting it out for £500 a week and Mr B who is paying a week rent to the council and is sub-letting for £500 a week. So why not make both these things illegal?

 

2) The whole RTB debacle has clearly reduced the number of people who can "secure a foot on the property ladder". At the very least, it has pushed up the rents which non-owners have to pay, thus leaving them less money to spend in the real economy or to save up towards a deposit. Glantz appears to be utterly clueless as to any of the facts and figures presented in the article?

 

3) That's just an outright lie. Even if it weren't, then it doesn't make sense. If you own a car and are happy with it, would you rather sell it at a discount and then buy a new one, or just keep your current car? And if "affordable housing" is a good thing (and it is), then why not just build more without selling off the existing stock? Or, if Westminster Council had retained its entire existing stock and bumped up the rents to (say) £300 a week, that would give them a budget of £300 million a year to spend on building new housing (i.e. six thousand flats a year).