HANSARD
Housing (Right to Buy) (Limits on Discount) (England) Order 2024
- Motion to Regret
- 5:36 pm
- Moved by
- That this House regrets that the Housing (Right to Buy) (Limits on Discount) (England) Order 2024 (SI 2024/1073), laid before the House on 30 October, will reduce the number of social tenants who can purchase their property, undermine home ownership and cut new house building.Relevant document: 7th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).
- My Lords, this statutory instrument will reduce the number of qualifying secure tenants who have the opportunity to buy their rented home at a discount. This will reverse our record in the period 2012 to 2024, which enabled almost 160,000 sales under the right-to-buy scheme. On our watch, the right-to-buy discount was incrementally increased. In 2012, the maximum cash discount went up significantly from regional levels of between £16,000 and £38,000 to a new national level of £75,000. In 2013, the maximum was propelled further in London to £100,000, and from 2014 the maximum discounts rose annually, in line with the percentage change in the consumer prices index. The current maximum discounts available are £136,400 in London and £102,400 outside London.Our aim is to move towards a scenario where people own their own home and are less reliant on local authorities. Being able to buy your own home is a critical feature of social mobility. It allows people to acquire an asset which translates into wealth, which can then be passed on to the next generation, which in turn gives more opportunities in life. The Government have cut the maximum discount to between £16,000 and £38,000, which means that secure tenants of local authorities who want to buy their home will have to pay materially more for their property.The Ministry of Housing, Communities and Local Government has released a policy paper on the review of the right-to-buy discounts which showed that sales will be reduced by 25,000 over five years. By the department’s modelling, under the previous Government’s rules 35,000 people would be able to buy their social housing by 2029, but under this Government’s new rules that figure would only be 8,500. That means that 26,500 people will potentially miss out. The Government’s own modelling has shown that there would be 7,000 sales annually to 2031 if our rules were kept. However, that number will shrink to 1,700 per year under this Administration’s new rules. That means an average of 5,300 people per year will not be able to buy their home under the new restrictions.
- My Lords, I declare that I am a vice-president of the Local Government Association. Back in 1980, when the right to buy was brought in, I was in favour of it in principle, because it devolved power and responsibility from the state to the individual. It seemed to me that it would lead to greater investment in homes if more private cash was spent on upgrading the country’s housing stock. I did not support selling off social housing without any replacement, always urging for one-for-one one replacement. But that never happened, and worse, around 40% of those homes sold ended up in the private rented sector, with higher rents pushing up the housing benefit bill.Paragraph 5.5 of the Explanatory Memorandum is very clear in its explanation of this statutory instrument. It says:“The Government’s objective is a fair and sustainable right to buy scheme that protects existing social housing stock whilst ensuring that secure tenants who have lived in, and paid rent on their homes for many years, retain the opportunity to own their home. This statutory instrument will directly support that objective”.The two key words seem to me to be “fair” and “sustainable”. It is fair that those who have paid rent for many years should be able to benefit from their rent being seen as a form of deposit, and this statutory instrument will still enable them to do so.Back in 1980, it was only fair that council tenants of long standing should not be excluded from the benefits of inflation on the capital asset they were renting. But the situation is very different today. Discounts have got bigger. Housing for social rent has been neglected. There is a massive affordability crisis in buying a home for those on lower incomes as prices have continued to rise steeply. Yet rented housing—private or public—is nowhere near enough to meet demand from those unable to buy, and more people than ever are homeless.
- 5:45 pm
- It is true that the Government are reducing the levels of discounts and extending the qualifying period to 10 years as a tenant from a minimum of three now, and avoiding financial loss where a property has received investment prior to sale. As the Deputy Prime Minister has said,
- “we are losing more social homes than we can build, at huge cost to families, to taxpayers, and to communities”.
- That is undeniably true, and the aim of this SI is to do something about it—and we need to do something about it, with 1.2 million households on council waiting lists.
- The noble Earl, Lord Effingham, in winding up the debate on housing supply and homelessness last Thursday for the Conservative Benches, said:
- “Homelessness should have no place in this country”.
- He also said:
- “Everyone wants to end homelessness”.—[Official Report, 5/12/24; cols. 1340, 1342.]
- That is quite a comment on the record of his party in government in recent years. Homelessness indeed should have no place in this country and the level of homelessness is very troubling. There are 123,000 households and 159,000 children in temporary accommodation. Council spending on temporary accommodation reached £2.29 billion last year, which the National Audit Office said recently is “unsustainable”—it is unsustainable.
- Homelessness cannot be solved without having more social homes for rent. Is this statutory instrument fair? Is it in the public interest? Does it strike a balance between the needs of the taxpayer not to lose money, and to get a fair price for a property, and the wishes of the tenant? I think it is fair and I have concluded that it strikes the right balance. I find it very puzzling that the Conservative Opposition in this Chamber can now happily say that it is right knowingly to sell off social housing when, in the period of their Government from 2015, they did not replace social housing adequately.
- We have a housing crisis and the Government have to do something about it. They will, in the course of time, review the decision they are making on this SI. However, I wish to make it absolutely clear that my party is very supportive of this SI as an essential step in producing enough social housing for rent.
- My Lords, until May, I was the leader of a council for 17 years. Under my leadership, every single home lost to right to buy was replaced, and then some. We delivered 1% of the entire national affordable housing stock each year through the 2010s. That needs an authority that is organised and ambitious, and a clear idea of what the state is for. Did we sit there moaning about right to buy? No, we did not; we just got on with it. We struck hard bargains with landowners and developers. We recycled capital receipts. We built new homes for rent, of different tenures and different types, in both towns and villages, but mainly for social rent. That income kept council tax down for everyone. It can be done.Throughout the 2010s, it helped that there was a 25% new homes bonus kicker for the delivery of new homes under social rent. It certainly helped when the last Government changed the rules so that we got to keep all the money to reinvest in new homes rather than see it go to the Treasury, particularly for temporary and short-term accommodation, where the need has become suddenly greater following Covid.I can tolerate restrictions on right to buy on brand new homes, but I cannot abide those who stand in the way of a family cherishing an older property that could be brought into their ownership, the money for which would allow a new, much more modern and cheaper to run home to be built. For too long, blaming right to buy has been an excuse for inaction on house- building by councils. It has been a case of blaming the Government rather than rolling up your sleeves.I am disappointed that the Government are diluting the incentive for families to take the plunge to seek more security and a stake in society. I particularly regret that the statutory instruments committee had to drag the full extent of these regressive proposals out of the Government, who either had not shown or did not want to show how many families would be disadvantaged by this proposal.
- I rise briefly to take part in this debate. Before doing so, I draw Members’ attention to my register of interest: I am a vice-president of the Local Government Association and a director of a fully privately funded affordable housing provider that actively encourages its tenants to buy their homes after five, 10, 15 or 20 years. It is called Rentplus and it does what it says on the tin: you rent at a discounted price and you buy at a discounted price. I work for somebody in the private sector who preaches the possibility that home ownership should be within everybody’s reach.I will support my noble friend by going through the Division Lobby with him when he chooses to divide, but I will not agree on the reason. My reason is not that the Government are being unreasonable in setting the numbers they have chosen. Putting numbers on a piece of paper is a big mistake when talking about property markets; they are so varied in so many places for so many different reasons that it is better to put a percentage figure. I disagreed with what the last Government did by increasing the discounts to such a level that only really rewarded avaricious grandchildren, not the hard-working tenants who had occupied their homes for a long time. A number of elderly people were pressured into buying their houses for a capital sum that would go to their grandchildren. That should not have happened unless that grandchild had lived with those grandparents.But, as my noble friend Lord Fuller said, right to buy is probably the single biggest piece of social mobility legislation enacted since the war. It enabled a million families to gain access to capital who never had done in the history of their families. I do not think anybody has done any work, but somebody should do, on how many businesses were set up in this country by people who could leverage capital they had not previously had access to. For a number of reasons—I think about our care sector, as people need access to capital to be able to pay to have care nowadays—this country would fall apart without it.