We need a Right To Buy for private sector tenants, too

Make 'em sell. Image: Getty.

The Conservatives fancy themselves as the party of property ownership, a theme that they hope will win them the General Election. They’ve made the revival of a property-owning democracy a cornerstone of today’s manifesto.

The trouble is, their record on home ownership is pretty terrible. The number of owner-occupied households has been falling since 2003, when it peaked at 71 per cent, and the coalition government has failed to arrest that fall. Owner-occupiers now make up 63 per cent of the population, with renting having increased as more and more people are priced out of the market.

In 2002, more than 500,000 households bought their first home. On the coalition’s watch, the annual average of 248,000 is half that. That’s a lot of thwarted first-time buyers, and a lot of ground to make up.

It’s not like the Tories haven’t tried really hard to promote home ownership. They introduced Help to Buy mortgages and equity loans to make lending more accessible to would-be first-time buyers. Since 2013, 70,000-odd households have taken that up.

The coalition also decided to bribe the hell out of people who are still in council houses and in a position to exercise their Right to Buy. Since 2012, 26,000 council tenants have received discouts of up to 70 per cent to buy their home – though only 2712 new homes have been built to replace them.

That’s around 100,000 families in total. To be frank, that’s a feeble attempt to create a property-owning democracy. What could be the government be doing wrong?

One argument that’s doing the rounds is that house prices are too high. This analysis might appeal to Conservatives, who tend to believe quite strongly in market forces.

The idea is that there is not enough supply of houses to meet our demand for them. That pushes prices up, which means that even with subsidised mortgages, people on average incomes can’t access enough loan to buy an average home. The solution would be to allow more houses to be built.

But for some reason this didn’t appeal to the coalition; 250,000 are needed per year – in addition to the 1m backlog – but only half that were built in 2014. The government vetoed nearly 10,000 new homes this year and its planning legislation makes it hard to expand cities.

The other possible explanation is that the government is not handing out enough bribes – a theory that explains why there are those within the Conservatives who, instead of using taxpayers’ money to build new homes, would prefer to give it to people to buy existing ones.

This is the analysis that appears to hold sway in Downing Street. The Chancellor announced a £3,000 bribe for first-time buyers through the Help to Buy ISA in his March Budget, but that has been put in the shade by newly announced bribes of up to £102,000 for housing association tenants to purchase the home they live in. The Conservatives reckon that will help 1.3m tenants become homeowners.

The policy requires a touch of legal wizardry that makes it possible to sell property that doesn’t already belong to the state. But once the government can force private organisations like housing associations to give up their valuable assets, then the home ownership revolution can really begin.

Selling off housing association homes would boost owner occupation rates back up to 68 per cent. But if the Tories are serious about helping people buy their home – you know, not just saying it because it sounds good – there needs to be a right to buy for tenants in the private sector, too. Why should social tenants have more right to buy a home than private ones, who typically put up with higher rents, lower security and poorer conditions as it is?

There are more than 4 million households renting from a private landlord – 1.4 million of whom have been living in their current home for at least three years. Offering bribes to help these private renters buy their home – and compelling their landlords to sell – would boost home ownership levels past their historical peak to 74 per cent. David Cameron has a golden opportunity to take on the landlord class on behalf of all those hard working private renters and change even more lives. He could achieve more than Maggie Thatcher ever did to forge a property-owning democracy. What’s he waiting for?

Dan Wilson Craw is head of communications for Generation Rent.


As EU funding is lost, “levelling up” needs investment, not just rhetoric

Oh, well. Image: Getty.

Regional inequality was the foundation of Boris Johnson’s election victory and has since become one of the main focuses of his government. However, the enthusiasm of ministers championing the “levelling up” agenda rings hollow when compared with their inertia in preparing a UK replacement for European structural funding. 

Local government, already bearing the brunt of severe funding cuts, relies on European funding to support projects that boost growth in struggling local economies and help people build skills and find secure work. Now that the UK has withdrawn its EU membership, councils’ concerns over how EU funds will be replaced from 2021 are becoming more pronounced.

Johnson’s government has committed to create a domestic structural funding programme, the UK Shared Prosperity Fund (UKSPF), to replace the European Structural and Investment Fund (ESIF). However, other than pledging that UKSPF will “reduce inequalities between communities”, it has offered few details on how funds will be allocated. A public consultation on UKSPF promised by May’s government in 2018 has yet to materialise.

The government’s continued silence on UKSPF is generating a growing sense of unease among councils, especially after the failure of successive governments to prioritise investment in regional development. Indeed, inequalities within the UK have been allowed to grow so much that the UK’s poorest region by EU standards (West Wales & the Valleys) has a GDP of 68 per cent of the average EU GDP, while the UK’s richest region (Inner London) has a GDP of 614 per cent of the EU average – an intra-national disparity that is unique in Europe. If the UK had remained a member of the EU, its number of ‘less developed’ regions in need of most structural funding support would have increased from two to five in 2021-27: South Yorkshire, Tees Valley & Durham and Lincolnshire joining Cornwall & Isles of Scilly and West Wales & the Valley. Ministers have not given guarantees that any region, whether ‘less developed’ or otherwise, will obtain the same amount of funding under UKSPF to which they would have been entitled under ESIF.

The government is reportedly contemplating changing the Treasury’s fiscal rules so public spending favours programmes that reduce regional inequalities as well as provide value for money, but this alone will not rebalance the economy. A shared prosperity fund like UKSPF has the potential to be the master key that unlocks inclusive growth throughout the country, particularly if it involves less bureaucracy than ESIF and aligns funding more effectively with the priorities of local people. 

In NLGN’s Community Commissioning report, we recommended that this funding should be devolved to communities directly to decide local priorities for the investment. By enabling community ownership of design and administration, the UK government would create an innovative domestic structural funding scheme that promotes inclusion in its process as well as its outcomes.

NLGN’s latest report, Cultivating Local Inclusive Growth: In Practice, highlights the range of policy levers and resources that councils can use to promote inclusive growth in their area. It demonstrates that, through collaboration with communities and cross-sector partners, councils are already doing sterling work to enhance economic and social inclusion. Their efforts could be further enhanced with a fund that learns lessons from ESIF’s successes and flaws: a UKSPF that is easier to access, designed and delivered by local communities, properly funded, and specifically targeted at promoting social and economic inclusion in regions that need it most. “Getting Brexit done” was meant to free up the government’s time to focus once more on pressing domestic priorities. “Getting inclusive growth done” should be at the top of any new to-do list.

Charlotte Morgan is senior researcher at the New Local Government Network.