One of the bribes that the Conservatives made before the election was to extend the right-to-buy scheme to people in housing association properties. Right-to-buy is a scheme where people renting social housing for 5 years get the option to buy their house at a pretty significant discount. Nice for anyone who can get it, but it has been shown to often turn council house tenants in to private landlords, increasing the cost to councils as they subsequently pay housing benefit to those private landlords on the very properties that the councils used to own. Opposition parties are not particularly happy about extending the scheme to the 1.2 million housing association properties, but the government has come to an unofficial agreement with housing associations. An unofficial agreement means that the liability doesn’t become part of the national debt (an accounting cheat, since it is now a genuine liability), and also without legislation it doesn’t go for debate in parliament.
So how is this going to be funded? Housing associations are private businesses which currently make a nice profit from renting out their housing, allowing them to pay hundreds of thousands of pounds to their chief executives. They can’t be realistically expected to give all of their housing stock away for significantly less than market price without compensation. If we are bribing voters with cut price houses, the money has to come from somewhere. Well, the government has decided that local councils should pick up the bill. They won’t be getting extra money for that of course – they will do this by being forced to sell off council housing to raise money. That’s right – council housing will be sold off to pay for giving away housing association homes at a cut price. Not only will there be less housing association housing, there will be less council housing. The net effect is more people renting from private landlords at higher rents, costing the taxpayer more in housing benefit. Every person in the country will pay the price. Mwhahaha.
Worst hit will be London. Shelter have calculated that in parts of London, the government policy will force councils to sell off 97% of their housing stock. This is because councils will be told to sell all housing over a certain price, which in London is almost all council houses. At last, councils will stop providing social housing, and we can increase the profits of the private sector. Mwahahaha.