“Just look at housing to see the true cost of privatisation”

“Council homes are being sold off far more quickly than new social homes are being built, a new report has warned. The research into the government’s right-to-buy scheme, by the Local Government Association, finds that this has been the case since 2012: at no point has the social housebuilding rate matched, or come close to matching, the rate at which homes are being sold.

Right to buy was given a boost by the Conservatives after the 2010 election in an attempt to sell even more homes, since traditionally homeowners tend to vote Tory. In 2013, the then chancellor, George Osborne, announced the maximum discount available for those renting a council home in London would rise to £100,000. In effect he’d approved the asset-stripping of some of our most-needed council stock.

But right to buy needs to be viewed for its long-term effects, and not just with regard to how it helped those families who bought their council homes in the 1980s and 90s. Today, 40% of the homes sold under the scheme are rented privately at far higher rents than local authorities would ever charge. Right to buy has become right to buy to let.

Across the country, home ownership is in crisis, with renting exorbitantly expensive and young people especially – even those in professional jobs – being priced out of the market. Their earnings disappear into the pockets of private landlords, while the finances of local government are given a kicking.

Council housing works because it pays for itself relatively quickly: the rent paid by tenants covers the building costs in the long term, and eventually makes a profit for the local authority, which continues to invest in the local area. The money continues to circulate within the community rather than simply boosting the profits of landlords.

But with councils forced to sell to tenants through right to buy, then being obliged to give a chunk of the receipts straight to Whitehall, building becomes ever more difficult. And the property shortfall is expensive, as authorities struggle to house their homeless residents. Last year £8.4m was spent by 23 councils to rent 725 flats as temporary accommodation, the magazine Inside Housing found. A vast transfer of wealth has taken place from the public to the private sector, under the guise of helping the aspirational working class. Instead, we’ve just made it harder to provide housing for those most in need.

The folly of right to buy echoes the mess that is Britain’s rail system. In the mid-90s, John Major – echoing Margaret Thatcher’s disdain for the state a decade earlier – believed that breaking up British Rail would create competition, and that competition would ensure greater services and be far more efficient than control by the bloated state. Instead, the cost of train travel has become exorbitant, the service appalling almost everywhere you attempt to travel, and the state is constantly required to intervene – either because a franchise has collapsed, in the case of the east coast mainline, or because the rail service has become chaotic, witness recent weeks in the north and the south-east.

The long-term effects of privatising both rail and housing, aside from ensuring we live in a country of crumbling infrastructure (in contrast to mainland Europe), is one of diminished social and personal opportunities. Many people are unable to see friends and family as often as they’d like due to the cost of rail travel. Others are delaying having children, or wondering if they can afford them at all, since they cannot afford to buy a home and landlords can be hostile to children. Those with children are in no better position: well oOverMore than 100,000 children are living in temporary accommodation, usually due to eviction.

Right to buy was popular, but with 1.8m council homes having been sold off, there are now about 750,000 households paying far more than a local authority rent. Housing, not buying, should be a right – and available and affordable for all. Right to buy is devastating our housing system, just as rail privatisation has devastated our transport infrastructure.

Privatisation rarely works: we need new ideas, and far more public ownership of housing, infrastructure and utilities, if we wish to provide for our citizens.”

https://www.theguardian.com/commentisfree/2018/jun/12/housing-true-cost-privatisation-right-to-buy-landlords

One thought on ““Just look at housing to see the true cost of privatisation”

  1. The Conservatives position “Right to Buy” as being beneficial to social housing tenants by allowing them to get on the housing ladder. And this is true – but obviously this cannot be a long-term Conservative policy if new social housing is not built to replace that sold because eventually there will be no social housing stock for tenants to buy.

    An alternative explanation is that the Conservatives are undertaking social engineering in order to increase their chances of staying in power rather than for altruistic reasons. Here are a few possible alternative explanations for the Right to Buy policy:

    1. Homeowners are more likely to vote Conservative than council tenants;

    2. Homeowners with a mortgage are far less likely to strike than council tenants because of the fear that they will lose their home if they cannot keep up with their mortgage payments.

    3. Reduced social housing availability will improve the profitability of both developers and the private rental sector by reducing the competition provided by local council social housing.

    All of these seem very plausible to me – do they sound plausible to you?

    Remember: The cabinet papers from Thatcher’s first term show that the Government has been secretly planning the privatisation of the NHS for 40 years since it was proposed in a cabinet meeting and deemed too toxic to be a public policy. If that is true, then why shouldn’t we equally believe that there are one or more secret motives for Right to Buy?

    Like

Comments are closed.