Right-wing think tank recommends selling off social housing
Published by Jon Land for 24dash.com in Housing and also in Central Government, Finance
Report recommends selling off social housing
A right-wing think tank has recommended selling off social housing to generate the building of new stock.
Policy Exchange's report - Ending Expensive Social Tenancies- advises selling off "costly" social housing when it becomes vacant. It claims that £4.5 billion could be generated annually in this way, which could be used to build "80,000-170,000 new social homes a year".
Policy Exchange - which has been influential in the current government's decision making - argues that such an approach could reduce housing waiting lists by between 250,000-600,000 households in five years.
Its report found that:
- Expensive social housing accounts for over a fifth (21.8%) of the total social housing stock in the UK. This equates to 816,000 out of a total of 3.78 million properties.
- London has the highest proportion of stock (30.7%) and the North East contains the lowest (14.8%)*
- The total value of expensive social housing is £159 billion. London contains social housing worth £71.9bn while the North East has £4.4bn worth of expensive social housing stock
- Approximately 3.5% of this stock becomes vacant a year due to people moving out or dying. This means that the government could sell a total of 28,500 properties on the open market each year. This raises £5.5 billion a year.
- After paying off the debt held against the stock, the total figure raised is £4.5billion.
Alex Morton, author of the report, said: “Expensive social housing is costly, unpopular and unfair. That is why almost everybody rejects it. Social housing tenants deserve a roof over their heads, but not one better than most people can afford, particularly as expensive social housing means less social housing and so longer waiting lists for most people in need.”
Welcoming the report, Housing Minister Grant Shapps told the Daily Telegraph: "It clearly makes sense to use housing stock as efficiently as possible. Where you have houses which are worth millions, you could sell them and build a lot more homes to help sometimes vulnerable people come off the waiting list.
"It is blindingly obvious. And only a perverse kind of leftwing dogma that appears indifferent to the suffering of those languishing on record waiting lists prevents this kind of common sense from prevailing."
Responding to the report, David Orr, chief executive of the National Housing Federation, said: “The Policy Exchange’s report rightly recognises that we have a huge shortage of homes and urgently need to start building more. And part of that solution is that housing associations should be able to take advantage of the value of their properties in different ways.
"However, the idea of selling off social housing in ‘high value’ areas to build more in cheaper areas is fundamentally flawed. It could effectively cleanse many towns of hard working people who simply can’t afford the high prices of buying or renting privately. The report also ignores the fact that there is not the mortgage availability or market for people to buy these homes.
"We absolutely agree that housing associations need more flexibility over how they best use their properties, but as independent businesses they cannot, and should not, be forced to sell off their assets. The answer is building more homes and the flexibility to take an imaginative approach – this might sometimes mean selling some of their higher cost properties, or it might involve taking advantage of the value of those properties to innovatively raise finance.”
Gavin Smart, Director of Policy and Practice at CIH, said: “Policy Exchange has rightly highlighted that social landlords must make the best possible use of their properties to deliver social objectives.
"However, the report oversimplifies the challenges landlords face in managing their homes. A mandatory system of property disposals does not allow space for the flexibility that housing practitioners need if they are to manage their housing stock effectively.
“These proposals also risk blaming social tenants for the consequences of the last property bubble –Policy Exchange is suggesting that selling these houses and moving social tenants to areas of less expensive housing would open up the homeownership market – but we cannot blame social tenants for a housing market they did not create.”
Former Deputy Prime Minister John Prescott commented on Twitter: "Might have got @policy_exchange wrong. Their unworkable & idiotic plans are clearly satire."