Whatever John Prescott announces next week to curb the right to buy is welcome and long overdue (see page 7). The damaging effect of 23 years of Margaret Thatcher's first privatisation policy are now only too apparent to those at the sharp end of housing provision as they struggle to move 80,000 families out of bed and breakfast and battle with 70-year waiting lists for council housing. But just how Prescott's plans are received and, ultimately, how they will affect housing supply will largely depend how tough he is – and there's the rub: in the short term, the government's hands are tied to limiting the discounts available to council tenants.

This could help stem the loss of stock to the public sector, but in property hot spots the rising housing market makes even a £16,000 discount attractive to prospective homeowners. Ultimately discount cuts must come in tandem with curbs to abuses and loopholes. In London alone, at least 20 property companies are reckoned to be offering loans to tenants to buy their houses in order to sub-let them and then sell up after three years. Even fervent supporters of the right to buy must find it hard to justify this state subsidy of opportunistic property companies. Allowing councils to refuse to sell properties in regeneration areas at a discount, when they will then have to buy them back at market value, is also a no-brainer. Legal experts believe these new rules could take up to 18 months to make it into the statute books, during which time councils will no doubt receive more right-to-buy applications, but there's no avoiding that.

In some respects, the government can't win. Any curbs on the right to buy might lose votes without significantly adding to housing supply in the short to medium term. In the past two decades, 1.5 million council houses have been sold and only about 650,000 have been built, mostly through housing associations, to replace them. There's nothing wrong with allowing people on low incomes a chance to get a step on the property ladder by letting them buy their council houses. The big mistake is that during the years the policy has existed, housing investment has been allowed to fall more than 70% while £28bn has been raised selling off the family silver.

Even those in favour of the right to buy must find it hard to justify subsidising opportunistic property companies

Many thanks to all who gave so generously to our Christmas appeal. It raised £12,500 for the domestic violence charity Refuge. The appeal was also supported in parliament with more than 70 MPs signing an early day motion.

Source

Housing Today