This is spectacularly dysfunctional.
It’s not just historic flats from Britain’s postwar housebuilding boom that are being sold. Brand new council houses are also going under the hammer, almost as fast as they are being built. Design blog Dezeen revealed this month that seven of Norwich’s newest council homes are already in the process of being sold off, fewer than five years after they were completed. Other authorities have also been forced to sell their new council homes, such as Hackney in east London, which has already lost some of the social housing it built in Stoke Newington in 2018.
Despite right to buy being so destructive to public finances that it has been abolished in Scotland and Wales, Labour has announced it will keep Thatcher’s policy if it wins the next general election. This U-turn, backtracking on the party’s previous two manifestos, which promised to suspend sell-offs, has bitterly disappointed many local politicians who are desperate for change.
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It’s hardly surprising most councils are not building many homes at all, given they are obliged to sell them at a discount almost as soon as the paint is dry. Would you spend hundreds of thousands of pounds building a new house to rent out if your tenants could force you to flog it to them for less than it cost to construct, just three years later? According to research from UCL, right to buy “remains the major disincentive to local authorities building more social rent homes” as the majority of councils rightly fear the policy will impact any new housing developments they undertake.
Instead, many authorities have launched schemes to cling on to as much of their remaining stock as possible. Some offer grants to incentivise council tenants to buy on the open market instead of via right to buy. Wandsworth, in south-west London, for instance, will chip in up to £120,000 towards helping their tenants purchase a home “within the UK or anywhere else in the world”, provided it is not a council property.