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.

 
 
 
 

UK moves to ease lockdown, London mayor moves to investigate Covid-19 inequalities

Schools and shops are beginning to open their doors here in the UK, amidst concerns that the government is easing lockdown too early. Outdoor markets and car showrooms are allowed to re-open from today, while classrooms are reopening for children in reception, year 1 and year 6.

However, as many as a million children – half of those due to return – are expected to stay home due to safety concerns from both parents and schools. And overnight, the Association of Directors of Public Heath cast doubt on the government’s claims that the UK was meeting the five tests for easing lockdown. “Over the weekend we have seen signs that the public is no longer keeping as strictly to social distancing as it was,” it said in a statement. “A relentless effort to regain and rebuild public confidence and trust following recent events is essential.”

Meanwhile, London mayor Sadiq Khan has announced that Black, Asian and minority ethnic (BAME) people who work for the city’s government will be offered risk assessments in an effort to tackle the health inequalities thrown up by the Covid-19 crisis.

The service – which will be open to staff of the Greater London Authority, Transport for London, the Metropolitan Police and London Fire Brigade, among others – will consider the physical and mental health needs of all vulnerable staff workers.

The disproportionate impact the panedemic has had on ethnic minority communities has been a topic of concern to the mayor for some time. In a column for the Guardian in April, he noted that, despite making up just 14% of the UK population, BAME patients made up a third of critical covid cases. He called on the government to investigate, and asked the  Equality and Human Rights Commission to do the same the following month.

Today’s statement from City Hall notes that, according to the Office for National Statistics figures, black men and women are nearly twice as likely to die from coronavirus than white men and women, after taking into account age and socio-demographic factors. And a study by City Hall’s Intelligence Unit shows that London’s highest covd-19 death rate is in the east London borough of Newham, “where 82 per cent of the population are BAME, one in three is in insecure employment and there are high levels of deprivation, obesity and diabetes”.

More from City Hall here.