Fresh housing pain for millions

The challenge can be put simply: how do we provide enough affordable homes to buy and rent where they are needed? Not by the dog’s breakfast of Tory housing plans.

The Tory housing Bill now going through Parliament paves the way for selling off rented social housing at a discount and provides further discounts on new homes for first time buyers.

It will be paid for by councils paying the Treasury money. Social rents will rise and obligations on developers to contribute to public services where they are building homes and building some social housing will be removed.

Social housing rents will be means tested with landlords given access to the tax and income records of tenants. Central control of the process leaves Osborne’s claims of giving councils more powers – a ‘devolution revolution’ he claimed two weeks ago – alongside the rubble of council housing and the Northern Powerhouse.

Out of reach

There are nearly one and a half million people on social housing waiting lists in England – wanting or needing to rent. Uncontrolled rises in private rents have already forced up the housing benefit bill and the cost of buying a house is out of reach for most people in many parts of the country.

The supply of affordable housing to rent or buy has dried up in many areas.

The housing and planning Bill – introduced in Parliament this week –extends the old ‘right to buy’ your council house to all social housing. Around 1.3m social housing tenants will be free to get discounts to buy their properties – even those owned by private and charitable housing associations.

The government plan to force councils to pay for this by selling off their most valuable council properties. Any shortfall between the cost of the right to buy subsidy and the forced sale of council property will be met by the taxpayer.

Councils would still have to pay to build replacements for those council homes they have sold off as they are required to now. No one is fooled by that, because despite the requirement to replace like for like, only half are actually currently replaced.

Councils will have to pay central government even if they have not actually sold these homes. It will cost councils – who are about to be savagely cut again – up to £4.5bn.

If every tenant in England takes up the offer to buy social housing at a discount it could cost the taxpayer over ÂŁ11bn paid (ÂŁ4.5bn from councils and a further ÂŁ6bn plus to pay the cost of the taxpayer-funded discounts).

So taxpayers will subsidise private house buying from developers and from social landlords. And any houses built to replace those that have been sold will also come with their own right to buy clause.

The loopholes from the 80s round of right to buy have not been closed. Under the new scheme housing can be bought under right to buy – and then rented out.

George the builder?

As many as four in 10 of council houses already sold under right to buy are now in the hands of private landlords. It’s another round of right to buy becoming a buy to let money making machine for landlords. It is part of Osborne promoting himself as being ‘a builder’. But what’s been his track record since 2010?

At present we’re building only half the homes that we need to. We can’t even keep with population growth and have not done so through the years Osborne has been Chancellor.

It’s not that he hasn’t tried. It’s just that he’s no good at it. Osborne started his so-called revolution in self builds in 2010.The result was the number of self-builds actually fell. He said that by 2020 around one in four of all homes built will be self-builds.

What’s happened to that? The government won’t supply the full figures. Let’s assume if it had been a success we would know about it.

And then there was the 2011 Get Britain Building initiative (which trumpeted 16,000 new homes by 2014). It delivered less than a thousand new houses. And how about the 100,000 new homes a year and 25,000 new jobs from the 2011 Plan for Growth? That emerged from Osborne’s budget that year.

This was to be done by selling unused and derelict publicly owned land for housebuilding, producing 100,000 new houses by 2015. The National Audit Office looked at how well this worked. But how much was earned by the sell off? No one knows.

Was the public land sold at the going rate? No one knows. Were 25,000 jobs created? No one knows. Was any house building actually started on the sites? No one bothered to find out. Were any houses completed? No one knows.

Despite this incredible level of ignorance the scheme is being extended to produce another 150,000 homes by 2020. But there’s a flaw: this central government-led scheme does not count how many homes are built. Or even if any are.

A few civil servants very roughly calculate how many homes they think could be built. And then don’t bother to check.

It’s a further example of the growing gulf between Tory claims and what actually happens. There is now a huge incentive for social landlords to means test rents – which could see them hiked up from social housing rents to market rents.

In some cases, experts argue, a rise in income could triple rents in some areas. It certainly gets them out of the obligation – announced by Osborne – that social rents will be frozen for four years. Not of you can push them up by means testing.

And what is behind the u-turn of the National Housing Federation, which represents housing associations?

Giving tenants the right to buy social housing – when it was announced in the Tory manifesto – it said it was a “genuinely stupid idea”, adding, “The Conservative Party wants to sell assets that don’t belong to them, or to the nation…this is plain bad policy.”

And only a few months ago: “At its heart, imposing the right to buy on housing associations is a policy that will deny the aspirations of many, many more people than it will support, …If ever there was a time for Parliament to intervene and stop dangerously bad legislation it is now.”

But has the smell of money raised by pushing up means-tested rents changed its mind? Now the NHF says it wants freedom for their landlords to set their own rents.

Full market rent

Tenants with an income of more than £30,000 a year – a police officer, nurse or teacher – may be forced to pay full market rent rather than a social rent. If they do not reveal their income to the landlord, the landlord can apply the full market anyway.

This could double or triple rents. It makes a mockery of social housing, gives huge financial leverage to raise rents and creates its own social mobility trap.

Because while it’s being heralded as a ‘right to buy’ for those who can afford it, it has in fact turned in to a ‘pay more rent to stay’ for existing tenants who can’t.

The sheer perversion of what’s happening has not been lost on everyone. And it is the opposite of the pro-worker, ‘lower paid-friendly’ rhetoric of the Tory conference.

Labour’s London Assembly housing spokesperson Tom Copley was quick to pounce on the sheer stupidity of what is being proposed.

“The money raised through selling London’s council housing will be used to build new Starter Homes in parts of the country where there is no housing crisis.

“We will have the perverse situation where affordable housing will be sold in London – where we have an unprecedented shortage – to fund the building of new homes in parts of the country where there is no shortage.”

The last thing in the Tory mind is whether this Bill will deliver affordable homes to rent or buy where they are needed. It’s about delivering Tory votes.