19 Oct 2009

Right To Buy?

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.

4 comments:

AMW Monday, October 19, 2009  

I do agree with the SNP on this one but i can see some problems but i think the benefits far out way the concerns.

Maybe when all families in Scotland can afford to buy or rent a decent home then we can start to look at the right to buy again.

In Leith they have built thoudands of new flats and are out of reach for most locals. Most of the council stock is bought so what can locals who want a home of their own do ? Yes they move out of the area.

In some ways the SNP is lurching to the left to much for me, ie more state control etc but on the right to buy, im fully with them..

Aye We Can ! Monday, October 19, 2009  

I think there is good debate to be had about. But remember there are 600,000 tenants of councils and housing association who retain the right to buy, and some with huge discounts. The right to buy is only to be abolished for new tenants - in the short and even medium term a small small proportion of the total.

I do think though in this day and age the abolition of right to buy is just way out of line with modern and forward thinking public sector policy, where user and consumer rights need to be paramount if the ststem is to deliver a high quality and diverse service. This announcent also flies ine th face of all the Scottish governments shared equity initiatves aimed at encourgaing home ownership and noy insignificantly swallowing up an ever increasing slice of the housing budget at the expense of new build for rent. Why should new tenants alone be denied the right to at one stage enter the home ownership market whilst sitting tenants retain a hugely subsidised rate and distressed home owners benefit from all sorts of subsidies and reliefs to keep them in their homes? At bese this new announcement is half baked, at worst down right discriminatory.

Tom Wednesday, October 21, 2009  
This comment has been removed by a blog administrator.
TartanSeer Wednesday, October 21, 2009  

Your URL is duff Tom - 'Smeato' is on U-Tube here

http://www.youtube.com/watch?v=T4puHHSnbiw

Such a shame that this decent man has allowed himself to fall for his own publicity & make an erse of himself.

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