The ending of the right to buy for all new tenants was a good headline grabber by Nicola Sturgeon on the closing day of SNP conference yesterday. But on this one I do kind of agree with Labour's Cathy Jamieson when she said it "misses the point".
For me, the distorting factor in the whole right to buy debate has been the level of discount available to sitting tenants - one that in many instances makes it stupid for them not to buy and pocket a windfall capital gain plus often mortgage more or less (and sometimes less) than their rent. And we all know of cases of purchase by proxy, where a sitting tenant effectively buys on behalf of a relative or even private landlord: No real right to buy at all, just the right to pocket some dosh at the expense of the public in general and those on waiting lists in particular.
So it is the discount, plus the temptations and distortions this brings about that has been and remains the key issue. And it is long term sitting tenants that get the biggest discounts, new tenants taking years to accrue much. So yes, this announcement I think does miss the point in terms of the current housing crisis. Indeed, it will probably encourage more sitting tenants to buy, fearing pretty soon they will be next
I personally think all tenants, should retain the right to buy, an absolute right, but within the context of a much reduced discount regime. I think the maximum discount even for a long term tenant might be reduced to around 15% of a property's current market value, with next to nothing for those who are more recent tenants. To me this would be fair to the tenants - some recognition that their years of rent paying had made some contribution to the property's capital cost. But crucially, all the capital receipts from sales need to accrue in full to the relevant local council or housing association , with a legal obligation on them to use these receipts on new build. And with the discount level low to non existent, this should lead to a more or less like for like replacement in terms of new build for rent. Good for construction industry jobs too.
Keeping a reformed right to buy would also help promote a degree of mixed tenure, surely a good thing and some sort of guarantor against 60's style sink estates re-emerging? And also a guarantee against bad social landlords - if your service is sub-standard as at least some tenants can exercise their right to buy. Run a good service, why would they want to in great numbers?
And finally, I can't help but think this is all a bit of a smokescreen by the ever politically astute Nicola. Because her government, her department, is presiding over a £260 million cut in the social housing budget next year ( 2010-11), as proposed in the current draft budget. That's a 27% cut in this year's budget, the single biggest cut in any Scottish Government department, by quite some way. So much for shielding the poor from the worst of the recession, folks who it appears are now to lose the right to buy to help compensate for and cover up these cuts. And "record number of houses being built this year?" A record budget maybe, but where is all the money going? Let's see the detailed figures....still not published in any detail, and massaged in ways that would make Alastair Campbell blush.
And all politically stupid I think. Labour in Scotland will have the SNP's balls on plate on this issue, starting in Glasgow North.
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