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Right to Buy

Volume 600: debated on Monday 12 October 2015

(Urgent Question): Will the Minister explain to the House the details of the voluntary agreement on the right to buy negotiated with the National Housing Federation and how it differs from his original statutory approach?

As stated in our manifesto, the Government want to give housing association tenants the same homeownership opportunities as council tenants. Since the introduction of right to buy, nearly 2 million households have been helped to realise their aspiration of owning their own home. There have been 46,000 sales since April 2010, including more than 40,000 under the reinvigorated scheme introduced in 2012 by the last Government.

The Government want to help families achieve their dream of homeownership, but at the moment about 1.3 million housing association tenants cannot benefit from the discounts that the last Government introduced. We want to give housing association tenants the same homeownership opportunities as council tenants. At present, some housing association tenants have the preserved right to buy at full discount levels or the right to acquire at a much lower discount level, while others have simply no rights at all. This cannot be right. The Government want to end this inequity for tenants and extend the higher discounts to housing associations.

On 7 October, the Prime Minister announced that a deal had been agreed with the National Housing Federation and its members giving housing association tenants the opportunity to buy their home at an equivalent discount to the right to buy. This delivers our manifesto commitment to extend the benefits of right to buy to 1.3 million tenants. In summary, the deal will enable 1.3 million families to purchase a home at right to buy-level discounts, subject to the overall availability of funding for the scheme and the eligibility requirements.

The presumption is that the housing association will sell the tenant the property in which they live, the Government will compensate it for the discount offered to the tenant and the association will retain the sales receipts to enable it to reinvest in the delivery of new extra homes. Housing associations will use the sales proceeds to deliver new supply and have the flexibility, but not the obligation, to replace rented homes with other tenures, such as shared ownership. The Government will continue to work with the National Housing Federation and its members to develop new and innovative products so that every tenant can have the opportunity to buy or have a stake in their own home.

As part of the agreement, the Government will also implement deregulatory measures to support housing associations in their objectives to help support tenants into homeownership and deliver an additional supply of new homes. Boosting the number of sales to tenants will generate an increase in receipts for housing associations, enabling them to reinvest in the delivery of new homes. Housing associations will be able to use sales proceeds to deliver that new extra supply and will have the flexibility to replace homes with tenures such as shared ownership. Housing associations have a strong record in delivering new homes, as evidenced by the way we have exceeded our affordable homes target, delivering nearly 186,000 of them—16,000 more than originally planned for the period to 2015.

We want more people to be able to buy a home of their own, and extending the right to buy is a key part of that. It will give tenants who have that aspiration something to strive for that is achievable and give housing association tenants the opportunity for the first time to purchase their home at the same discount levels currently enjoyed by council tenants. We will now work closely with the sector on the implementation of the deal, and of course I will update hon. Members as we move through the stages of implementation.

I am sorry that I have had to drag the Minister before the House this afternoon. I am disappointed that the Secretary of State made a written statement this morning, but is not prepared to account for himself to the public this afternoon on one of the Prime Minister’s central election pledges. The extension of the so-called right to buy to housing associations, funded by the forced sale of council homes, will mean fewer genuinely affordable homes when the need has never been greater. We will oppose it. This is a back-room deal to sidestep legislation and proper public scrutiny in Parliament.

We have said from the start that this is unworkable and wrong—and so it is proving. The Minister’s and the Secretary of State’s statements today are riddled with holes. They are promising 1.3 million housing association tenants the right to buy their own home. How many tenants will not, in fact, have this right next year? What about those in at least 37 housing associations who have said no to the deal, and those many more who have not been consulted and have not replied? What about those in the nine separate categories of the deal

“where housing associations may exercise discretion over sales”?

What about those caught by the Secretary of State’s weasel words this morning in the written statement, whereby all this will be subject to

“the overall availability of the funding of the scheme”?

What do tenants do when the landlord says no? How can this be a “right” to buy, with no legislation behind it? In truth, this is not a right-to-buy, but a beg-to-buy policy, and many housing association tenants will find next year that they have been badly let down by the Prime Minister’s promises.

I strongly back the desire of most of us to own our own home. That is why I commissioned the chief executive of Taylor Wimpey to do a report for me on the decline of homeownership, which has gone down each and every year in the last five years. This right-to-buy policy, however, is bad housing policy. Shelter warned that 113,000 council homes could be sold off to pay for it, with no-go areas for many lower income families to live in in many of our major cities and towns. What assessment has the Minister made of the number of council homes that will be lost, and when will he publish the full impact assessment of these plans, as he promised the House he would on 29 June, and when will Members be able to vote on these plans, as the Prime Minister promised on 27 May when he opened the Queen’s Speech debate?

The Minister has talked about one-for-one replacement of all homes sold—well, we have heard that before. In 2010, the same promises were made for council homes, and it has been five years of failure—not with “one for one”, but with one home built for every nine sold. So what is the Minister’s guarantee for a one-to-one, like-for-like replacement for both council and housing association homes sold under this scheme, and how many of these genuinely affordable homes sold by housing associations will be replaced by homes that are not?

Finally, this is a challenge for the Chancellor as well as the Minister. This policy fails the test of good social policy and the test of sound economics. It squanders a long-term asset by selling it on the cheap. Will the Minister commit to publishing a full value for public money assessment because taxpayers will bear the cost three times over—first, for the public investment to build the homes; secondly, for the discount to sell them; and thirdly, for the higher housing benefit bill that will come when these homes are bought to let again to tenants at full market rents. If the Minister and his party really want to occupy the centre ground, they should drop this extreme policy. It is a bad deal for tenants and a bad deal for the taxpayer.

I have to say that the right hon. Gentleman’s opening remarks, when linked to his closing remarks, sum up where we are. I am disappointed that he seems to want to stop people having the right to own their own home. We will absolutely support people in that right. He talks about the written ministerial statement, but this happened because we have been very busy getting on with the business of delivering homes for people and the right to buy, rather than spending time talking about reports and process.

A few weeks ago, my right hon. Friend the Secretary of State and I spent a couple of days at the National Housing Federation conference talking to housing association members and their representatives. I am not sure whether the right hon. Gentleman was there—we did not see him—but we spent our time talking to the sector, and this is a deal from the sector. The housing associations now want to help their tenants into homeownership, and I applaud them for that. I think that they have done an excellent job in working to deliver a new model that presents a new opportunity to people throughout our country. Opposition Members seem determined to end that opportunity, and, indeed, the Labour party in Wales has stopped people having that aspiration.

This is a deal for the entire sector, as the sector itself has made clear. I am disappointed that the right hon. Gentleman has presupposed its stance by saying that it will oppose the deal. That puts him in an almost unique position. The tenants want the chance to buy, and the housing associations proposed the deal. It is disappointing that the right hon. Gentleman has set himself against them by opposing their deal, which we have accepted after the work that they have put in.

I am sure that, if the right hon. Gentleman looks at the way in which we are providing homes and the way in which the deal will work for people throughout the country, he will recognise that the new portability arrangements will, for the first time ever, give those living in sheltered or extremely rural accommodation who—even under the current scheme—have no right to buy their own homes a chance to do so. I am proud that we are able to deliver on the aspiration and that manifesto promise.

I noted the right hon. Gentleman’s points about the number of homes being built, which Labour Members have raised many times. Eventually, they will come to acknowledge that, in 13 years of Labour government, 170 homes were sold for every one that was built. We have announced that, under the reinvigorated scheme, it will be “one for one”: for every home that is sold, an extra home will be built.

Let me make the facts clear. In year one of the scheme, 3,054 homes were built. In the equivalent year, three years on—councils have three years in which to build—3,644 homes have been built. That is more than one extra home for every one that is sold. If councils do not build a home in time, we in the Government will take the money from them, and we will make sure that those homes are built as outlined in the scheme. The building of that one extra home will drive up housing supply.

I am disappointed that the right hon. Gentleman has not been joined by the shadow Secretary of State, the hon. Member for Hemsworth (Jon Trickett), but I am delighted that my right hon. Friend the Secretary of State is able to join me to state very clearly to the House that we will support people’s desire and aspiration to own their homes. We will deliver the right to buy to those 1.3 million tenants. I thank the housing associations for the work that they have done, and for their willingness to stand up and deliver for their tenants and the tenants of the future. This is the most powerful form of social mobility that we can deliver, and I am proud to be able to be a small part of that.

Perhaps I should declare a family interest, as my late father was one of the authors of the original right to buy policy.

You are very kind, Mr Speaker.

I congratulate the Minister on his statement. Having raised the concerns of my constituents in housing association properties, I am delighted that this voluntary deal has been reached.

The Minister may be interested to know that Sanctuary Housing, which is the largest registered social landlord in the country and whose headquarters are in my constituency, has said not only that it thinks that the deal can be delivered with one-for-one replacement, but that it believes it can increase the supply of affordable housing over the next five years at almost twice the rate that it has been able to deliver over the last five years.

My hon. Friend has made some very good points, particularly the point about his father. That scheme enabled so many millions of families to own their own homes, and I think everyone who has been involved in it should be very proud of that.

Over the last few months and especially over the last few weeks, at the National Housing Federation conference and since, we have been talking to housing associations which clearly want to use this deal to make their assets work and to build more homes. We must remember that it will drive up housing supply.

The Scottish Government have taken action to abolish the right to buy for housing association and local authority tenants. We arrived at that position after observing the frustration of local tenants who could not gain access to stock because it was being sold up year after year. The pool of stock available to housing associations—particularly in cities, where land was not in great supply—was shrinking year after year.

I consider public housing—social rented housing—to be a public asset, and an important part of the infrastructure of our country. Why would a housing association providing housing for people with particular needs, such as disabled people, choose to invest in more expensive housing if that asset would be lost further down the line? Why would anyone invest in houses if they were not going to see that return and why would we continue to have that policy in particular areas where there is not enough land to replace them? We would just lose the investment that is there.

Has the Minister given any consideration to how this policy in England will affect housing associations that operate on a cross-boundary basis? Sanctuary Housing was mentioned earlier; it is a housing provider that operates both in England and Scotland. Scotland has protected the right to buy; England has not. Has any assessment been made of how this will impact on Scotland?

On the properties the hon. Lady outlined, in the deal itself and the right to buy there are exemptions, but I do sympathise with her point. I understand how the Scottish Government came to the point that they did in terms of the frustration with housing supply because, as I have just outlined, Labour simply did not build the houses over their 13 years in government. The answer is that we need to make sure we are building the houses. I would encourage the Scottish Government that the solution is not to stop people having the right to buy their own home. I would encourage that and use the money from that to build the extra houses we need; if Labour had done that for 13 years, we would not have lost the 420,000 affordable homes that were lost in those years. We have increased those numbers in the last Parliament. We will do so again in this Parliament and, through the money coming in from right to buy, there will be that full replacement income for housing associations to build an extra home; that is the key to this.

I congratulate the Secretary of State and Minister on this most civilised of solutions. However, may I raise a point I have had discussions with them on on a number of occasions: exemptions for small rural communities where housing association properties are extremely valuable but also extremely hard to replace? Have we had discussions with housing associations about the same exemptions for those small communities as are currently embodied in council house right to buy?

I thank my hon. Friend. He makes a good point. The housing associations have played a hugely important part through the way they have come forward with this deal and have recognised the mandate the Government got in the general election to deliver this. They have done an excellent job in this regard. This is about extending the right to buy and therefore the rural exemptions extend as well. Indeed my hon. Friend can see the deal on the National Housing Federation website and there are some examples there of the very point he has outlined.

As the Minister will be aware, there is a housing crisis in London. The cost of rent goes up each year and there are fewer and fewer homeowners in London. London does badly out of this scheme, which will be funded, as he is aware, by selling off family-sized social homes in London. In those circumstances, can he guarantee that the money raised from the right to buy sell-off in London will be ring-fenced to build genuinely affordable homes in London?

The “extra home built for every home sold” applies to London. London will see more homes built as a result of this and, even under the reinvigorated scheme from 2012 onwards, in the first year some 536 homes were sold in London and 1,139 were built in the period, much more than one extra built for every one sold.

From listening to those on the Opposition Benches, we might get the impression that this is a stand-alone measure, but is it not a part of our broader programme to encourage homeownership among the widest collection of people in the country, and is this not a good illustration of how we are committed to doing that?

My hon. Friend makes a good point. Yes, it absolutely is part of a wider package of work we have been doing and will continue to do to drive up home building as well as homeownership throughout different parts of the sector and with different types of tenure, while always remembering that 86% of our population want to own their own home and doing everything we can to support them in that aim.

May I pick up the point that has just been raised? I was very concerned that money raised from the right to buy in areas such as mine will leave the borough and possibly leave London altogether. The Minister has not really answered this point. It is vital that any money raised through right to buy is reinvested in the nearby area. We should therefore look at all schemes to include as much genuinely affordable housing as possible. For example, 900 homes are being built at 250 City Road in my constituency. The cheapest one-bed flat there is £865,000 so starter homes are simply not affordable there. Does the Minister agree that the only genuinely affordable homes at the 250 City Road scheme are likely to be those for social rent?

This is a pretty simple question of supply and demand. To get more affordable prices, we need to build more homes, and I hope that the hon. Lady will support this process, which is about getting more homes built in London and in the rest of the country.

I am pleased to hear from the Minister’s answer that the principle of reinvesting the proceeds of sales is at the heart of the proposals. Does not this underline the fact that our party is here not just for homeowners but for home building as well?

Absolutely; my hon. Friend makes an important point. We are hugely determined to drive up house building, having inherited from Labour in 2010—when the right hon. Member for Wentworth and Dearne (John Healey) was the Minister—the lowest level of house building that the country had seen since 1923. We have seen the figures rise, and they need to continue to do so. All the work going on at the moment is about getting more homes built in this country.

New Charter Homes, a registered social landlord in the Tameside part of my constituency, has just announced 150 job losses. It says that this is a direct consequence of this Government’s right to buy and rent policies. What assessment have the Government made of the impact of those two announcements on registered social landlords’ business plans, and what support will the Minister give to housing associations such as New Charter to ensure that their financial stability is put on a firm footing for the future?

I am almost at a loss for words. The right to buy for housing associations has not yet come into force, so how a housing association can be taking that view now is beyond me, particularly when we bear in mind that our policy will create more work for them. We want them to use the income from right to buy to build more homes, which will mean more work for the housing associations.

I welcome the Minister’s confirmation that housing associations in rural areas will continue to have an exemption. However, can he reassure those small communities in rural areas with very high housing costs, such as those in my constituency, that if the housing associations choose not to avail themselves of the exemption, any like-for-like replacement will be provided in the same area? If such replacement were provided in a distant town, our rural communities would be depleted.

My hon. Friend makes a good point, and I thank her and her colleagues for the time that they put in over the summer to talk to their local housing associations about the deal that the associations were working towards putting to us. It is important that people recognise that the rural exemptions will continue. We are extending right to buy and the rural exemptions are in right to buy. She will also be able to look at the portable option that the housing associations are putting forward.

The Conservatives cannot seriously believe that the way to deal with the housing crisis is to give developers carte blanche to build unaffordable housing, including on green-belt sites, while attacking social housing. This is not a policy of aspiration for the millions on social housing waiting lists, for those living in overcrowded accommodation or for those with no home at all. Will the Minister tell us why there is this discrimination between those who are in social housing and those in the private rented sector? Many in the latter category are desperate to get into affordable social housing. What will he do to prevent the homes that are sold from being put into the private rented sector, as has happened to 40% of previous right-to-buy homes?

First, 86% of the people in our country want the chance to own their home, and we make no apology for supporting them. On right to buy, we are talking about the housing associations building more homes. As we have already heard, a number of them—including some of the largest, such as Sanctuary, Orbit and L&Q—see this as a way of ensuring that their asset base can be used to deliver the extra homes that we need, to ensure that housing supply goes up. For those people in the private rented sector, I absolutely want to continue to do everything possible to support their aspiration to own. That is what Help to Buy is about, and it is what the 200,000 starter homes announced by the Prime Minister and the Chancellor of the Exchequer last week are about. I hope that the hon. Gentleman will support us in our programme of work.

I am pleased that my constituency’s largest housing association, Housing Pendle, is delivering 122 new affordable homes this year. Will the Minister confirm that extending the right to buy to housing association properties will mean more money overall, with money being released to build new affordable homes, thus helping more families to access the good quality, affordable homes they so desperately need?

My hon. Friend makes an excellent point. He has a good example in his local authority area of a housing association that is keen to build, and this scheme will allow it to access its assets to build more and to use that income to make sure it is building more homes to increase supply across our country.

Listening to the Minister, one would almost think he had not presided over a collapse in homeownership in this country during the past few years. In inner-London areas we face the prospect of losing up to three quarters of our social homes, which has led even the leader of Conservative Westminster Council to say that this is going to lead to the loss of a swathe of social housing. It is all very well for the Minister to say that he is going to replace in London, but people do not just live in a city—they live in communities, they live near their work and they live near their children’s schools. Will all replacement homes be built within the same local authority, where council housing and housing association properties have been sold off?

First, I say to the hon. Lady that the drop in house building that led to the drop in homeownership started under the Labour Government. In fact, the right hon. Member for Wentworth and Dearne (John Healey), who is on the Labour Front Bench, said that he had no problem with a fall in homeownership, but I have a different view. This Government want to make sure that we drive up not only home building but homeownership. We will do anything we can to support that, and this deal that the housing associations have put forward will help to increase the supply of affordable homes right across our country, including in London.

This is one of the best policies the Government have introduced. We are hearing the 1980s arguments all over again from Opposition Members. The truth of the matter is that when a property is sold, that person still lives in that property; I spoke to my local housing association over the weekend and it is really keen on this idea, because it will be able to invest in one and a half homes with this money—that is one and a half extra families with a house to live in. How can anyone possibly be against that?

As ever, my hon. Friend makes a hugely important point. I, too, am baffled as to why any Opposition Member would want to disagree with the housing associations, with their tenants, with the people of this country, who gave us a mandate to deliver this policy, and with the 86% of people who want the opportunity to own their own home. This approach will send housing supply up—he is absolutely right about that. A key point is that for every home sold this will mean at least one extra home being built. That increases housing supply. It is simple mathematics.

The hon. Member for Wellingborough (Mr Bone) said that the people who will buy their home will live in their home, but the evidence from the council housing right to buy shows that not to be the case, certainly not in London. What assessment has he made of how many of the homes to be sold under this policy are likely to become private rental properties—often at high rent and let to people in housing need who have no hope of owning their own home?

When a home is sold under the current right-to-buy scheme, there are restrictions on what people can do for a period of time, and that will continue in the extended scheme. Ultimately, many years down the line, I absolutely defend the right of any homeowner to do with their home what any other homeowner can do, be it selling it or living in it, but there are protections for the first few years after purchase.

I strongly support the right-to-buy approach and welcome what the Minister has had to say today. There are, however, concerns in Barnwell in my constituency relating to the replenishment of homes sold in rural areas, particularly given that a highly desirable new housing association development has just come on stream. What assurance can he give my constituents in Barnwell?

I have two points to make to my hon. Friend. First, for every home sold an extra home will be built in that area. Secondly, depending on the particular details of the area, the rural exemptions may apply, too. At the very least there will be an extra home built for every home sold.

Other than the right-to-buy scheme, what funding options has the Minister explored to provide social housing? Where I come from, the right-to-buy scheme—within the Housing Executive but not within a housing association—simply removes social houses from those who cannot afford to provide a home for themselves.

As I said earlier, I cannot speak for the Scottish Government, although I do encourage them to build more houses. [Hon. Members: “Northern Ireland!”] The whole point of this scheme is that, for every house that is sold, an extra home will be built. I say to the hon. Lady that the affordable house building scheme has delivered ahead of its targets, and we are now delivering at the fastest rate for more than two decades. I say to all Opposition Members that the Conservative-led coalition Government delivered more social council housing in five years than Labour did in 13 years.

I share the worries of many of my colleagues about replacement local provision. I assume that these sales will be under leasehold provision. The Minister knows that a number of us in the House have concerns about the weakness of the regulations covering people who own leasehold properties. Will he assure us that he will continue to look at leasehold reform as part of these proposals as well as separately?

Yes, I am happy to reassure the hon. Gentleman that we will continue to look at leasehold reform and to ensure that protections are there for leaseholders in the future.

In my constituency, Cestria Community Housing and Derwentside Homes have been building new homes both for rent and for sale. The things that have skewed their business plans have been the cap on rents and this right-to-buy proposal. Would it not be easier if the Government were to underwrite some of the borrowings of those housing associations that want to build, such as the two that I have just mentioned?

Obviously, rent changes are going through the House at the moment, but this right-to-buy scheme helps housing associations build more homes. It gives them access to more finance and a greater realisation of their assets, and I support that. With regard to the rent changes, bearing in mind the savings that are going on right across the public sector, looking for efficiencies of 1% a year from housing associations is not unreasonable. Many housing associations are embracing that idea.

The New Charter Group is a major social housing provider is my constituency. How can its housing associations support right to buy with no staff? As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, a loss of 150 jobs has been announced today. Inevitably, that will mean poorer services for tenants and fewer homes built for local people. Will the Minister meet New Charter’s management and the union Unison, which represents the workers? What action will he take to protect our social housing for the sake of current and future tenants?

What I say to housing associations and generally is that we do need to ensure that we are efficient in our use of public funds and of tenants’ income. Housing associations should be looking at that and at whether they have the right mechanisms and structures in place. I cannot comment on particular housing associations, but right to buy will mean that there is more work for them to do in terms of building those extra homes that we want to see right across the country.

In Northern Ireland, there has been a significant rise in the number of people who want to buy their properties. After five years, they can get a discount of up to £24,000. Quite clearly, it is a popular scheme and one that I support. Will the Minister confirm whether the investigation that was carried out by the Office for National Statistics will also be carried out in Northern Ireland? If so, will the Minister responsible for that area in the Northern Ireland Assembly be contacted first?

I am happy to have a conversation with the hon. Gentleman outside the Chamber to make sure that we get this matter into the right place.

Like the Minister’s rent and planning policies, this is all about the destruction of social rented housing, especially in high-cost housing areas. It is a piece of tawdry social engineering that exacerbates the housing crisis. Will he answer this question, which he has been asked several times and which he has refused to answer? Where council properties are being sold—we are talking about 50%, with more than 6,000 being sold in Hammersmith—will they be replaced like for like in the same borough so that people can move into those homes before the housing waiting lists get worse than they are at the moment?

The hon. Gentleman keeps talking about replacements as if homes are disappearing, but they are not. When people buy their home through right to buy, they will be living in that home. The income from that in the area will be used to build extra homes. The simple answer is that we want extra homes to be built, and I should have thought the hon. Gentleman would want to support us and his local authority in seeing more homes built to support the homeownership aspiration of people in London.

I am afraid that there could not be a wider gulf between the Minister’s responses this afternoon and the reality facing ordinary Londoners, who are finding it increasingly hard not just to own but to rent their own home. Since he has so far shown himself incapable of answering very simple and straightforward questions from my right hon. Friend the Member for Tooting (Sadiq Khan) and pretty much every other Member from London, let us give him another go. Will the Minister answer this question without obfuscation: will he guarantee that any home sold under the scheme will be replaced like for like in the locality from which it has been sold, such as a London borough? That is a straightforward question, so may we have a simple answer?

I thank the hon. Gentleman for the tone of his question, but he should bear in mind the fact that to have more homes available in London across the tenures, we need more homes to be built. Right to buy accesses finance to allow local authorities to build extra homes. More homes will be built—not just replacements —in London for Londoners.

I declare an interest as the vice-president of the Local Government Association. Is the Minister aware of the cross-party disquiet among local government leaders, adding to their headaches about the announcement he is about to make of the cuts for this Christmas? Has an assessment been carried out by the DCLG of the impact on London’s economy of this backward move?

I am not sure that I follow the hon. Lady’s exact point. For example, the chairman of the LGA is absolutely in favour of right to buy and supports the aspiration of people who wish to own their own home. The Government will continue to do that.