Housing associations' deal over right to buy could lead to the "social cleansing" of rich British cities

East London's New Era Estate. Image: Getty.

A gun to the head

Housing associations have until five o’clock on Friday afternoon to accept a “voluntary” deal on the right to buy that could change social housing for ever.

With 2.3m homes, housing associations are now the majority provider of affordable housing in Britain. The Conservative government was elected on a clear manifesto commitment to give housing association tenants parity with council tenants, by allowing them to buy their homes at a discount.

Yet rather than face the prospect of legislation that would force associations to sell their homes, the sector’s trade body, the National Housing Federation, has spent the summer conducting secret negotiations to offer a “voluntary deal” to the government. 

There is a great deal of ambiguity about the exact legal status of housing associations – but at present, their £60bn of debt does not sit on the government’s balance sheet. A compulsory Right to Buy scheme could change this forever: if private assets can be forcibly sold, they are clearly not private assets.

If the government were to find that it “owns” the debt, it could decide to move to privatise housing associations. The rumour is that investment bank Goldman Sachs has been appointed, to model how a nationalisation and privatisation of housing associations could be carried out. 

The NHF believes that introducing a voluntary Right to Buy scheme will avoid compulsion and stave off privatisation. To gauge how many housing associations would follow any voluntary scheme, it sent a form that resembles a ballot paper to 1,100 members of the NHF. Each association will get a vote proportional to the number of homes that they own.


In other words, a large association with 60,000 homes will have 60,000 votes on a single ballot paper. It’s akin to the old union block vote and, according to some critics, deeply undemocratic. (Editor’s note: The NHF say this is because it wishes to know how many homes would be included in the policy.)

Crucially, government statements earlier this year suggested that the discounts offered to tenants (up to £104,900 in London, £77,900 elsewhere) will be funded by the forced sale of high value council owned properties. The NHF doesn’t appear to have consulted the local authorities who would be affected by this “secret” deal, and many councillors are extremely angry.

The deal would allow housing associations to retain the receipt from any sales, and to build a replacement property of any tenure, including properties for outright sale. But individual housing associations will not be required to replace every property sold, or to replace them in the same area.

Instead, the sales and replacements will be totted up nationally – so associations could, at least in theory, sell high value properties in inner London and replace them in Sunderland. Critics fear that the Right to Buy, coupled with the forced sale of council stock, will lead to “social cleansing” in inner London and high value cities like Oxford and Cambridge. 

There are a number of questions hanging over this deal. How can housing associations be expected to make such a momentous decision so rapidly and based upon such scant information? Do individual housing associations and their trade body have a mandate to sell off what some still see as much-needed public assets?

Should the 66,000 families in temporary accommodation have a say? Or the 1.4m people on waiting lists? Or the millions of taxpayers who funded these schemes in the first place? And, crucially, why should Parliament be denied a vote on this critical issue?

The more you look at it, the more this looks like a grubby deal that requires proper public debate.

Colin Wiles is a housing and planning consultant at Wiles Consulting.

 
 
 
 

What does the Greater Manchester Spatial Plan mean for the region’s housing supply and green belt?

Manchester. Image: Getty.

We’re not even halfway through January and we’ve already seen one of the biggest urban stories of the year – the release of Greater Manchester’s new spatial plan for the city-region. The Greater Manchester Spatial Framework (GMSF) sets an ambitious target to build more than 200,000 homes over the next 18 years.

Despite previous statements indicating greenbelt development was off the table, the plan allows for some moderate easing of greenbelt, combined with denser city centre development. This is sensible, pragmatic and to be welcomed but a question remains: will it be enough to keep Manchester affordable over the long-term?

First, some history on Manchester’s housing strategy: This is not the first iteration of the controversial GMSF. The first draft was released by Greater Manchester’s council leaders back in October 2016 (before Andy Burnham was in post), and aimed to build 227,000 houses by 2037. Originally, it proposed releasing 8.2 per cent of the green belt to provide land for housing. Many campaigners opposed this, and the newly elected mayor, Andy Burnham, sent the plan back to the drawing board in 2017.

The latest draft published this week contains two important changes. First, it releases slightly less greenbelt land than the original plan, 4.1 per cent of the total, but more than Andy Burnham previously indicated he would. Second, while the latest document is still ambitious, it plans for 26,000 fewer homes over the same period than the original.

To build up or to build out?

In many cities, the housing supply challenge is often painted as a battle-ground between building high-density homes in the city centre or encroaching on the green belt. Greater Manchester is fortunate in that it lacks the density of cities such as London – suggesting less of a confrontation between people who what to build up and people who want to build out.

Prioritising building on Greater Manchester’s plentiful high-density city centre brownfield land first is right and will further incentivise investment in public transport to reduce the dependence of the city on cars. It makes the goal in the mayor’s new transport plan of 50 per cent of all journeys in Greater Manchester be made on foot, bikes or public transport by 2040 easier to realise.

However, unlike Greater London’s greenbelt which surrounds the capital, Greater Manchester’s green belt extends deep into the city-region, making development on large amounts of land between already urbanised parts of the city-region more difficult. This limits the options to build more housing in parts of Greater Manchester close to the city centre and transport nodes. The worry is that without medium-term reform to the shape of Manchester’s green belt, it may tighten housing supply in Manchester even more than the green belt already does in places such as London and York. In the future, when looking to undertake moderate development on greenbelt land, the mayor should look to develop in these areas of ‘interior greenbelt’ first.

Greater Manchester’s Green Belt and Local Authority Boundaries, 2019.

Despite the scale of its ambition, the GMSF cannot avoid the sheer size of the green belt forever: it covers 47 per cent of the total metropolitan area). In all likelihood, plans to reduce the size of the green belt by 2 per cent will need to be looked at again once the existing supply of brownfield land runs low – particularly if housing demand over the next 18 years is higher than the GMSF expects, which should be the case if the city region’s economy continues to grow.

An example of a successful political collaboration

The GMSF was a politically pragmatic compromise achieved through the cooperation of the metropolitan councils and the mayoral authority to boost the supply of homes. It happened because Greater Manchester’s mayor has an elected mandate to implement and integrate the GMSF and the new transport plan.

Other cities and the government should learn from this. The other metro mayors currently lacking spatial planning powers, in Tees Valley and the West Midlands, should be gifted Greater Manchester-style planning powers by the government so they too can plan and deliver the housing and transport their city-regions need.

Long-term housing strategies that are both sustainable and achievable need to build both up and out. In the short-term Greater Manchester has achieved this, but in the future, if its economic success is maintained, it will need to be bolder on the green belt than the proposals in the current plan. By 2037 Manchester will not face a trade-off between high-density flats in the city centre or green belt reform – it will need to do both.  If the city region is to avoid the housing problems that bedevil London and other successful cities, policy makers need to be ready for this.

Anthony Breach is an economic analyst at the Centre for Cities, on whose blog this post first appeared.