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RTB: not ‘one for one’ and definitely not ‘like for like’.

Yesterday’s publication of the consultation document (and the draft impact assessment) on the Government’s plans to increase the discounts available for the Right to Buy and for ‘one to one replacement’ with affordable homes is about as cheering as the pre-Xmas homelessness figures.
In many ways it’s a clever offer, or a clever bit of spin, in that it appears to deal with previous complaints about the RTB, and especially the lack of replacement of the homes sold, which meant that future generations of potential tenants effectively paid the price for sales.  It remains to be seen whether the proposed rise in discounts – to an upper limit of £50,000, an effective increase from 25% to 50% – will ‘reinvigorate’ the RTB as much as the Government hopes.  They estimate that some 300,000 tenants are eligible for the RTB and have the financial means to exercise it.  But many houses and the more attractive homes have already been sold and there is huge uncertainty over future property values – we are all more risk averse than we were.
A proportion of the additional receipts will be channelled back, either nationally or locally, into further housing provision.  But this will meet only a share of the cost of replacement, which will be variable between regions.  If the additional RTB proceeds only meet part of the cost it cannot be said that the new scheme itself achieves one for one replacement.  Replacement will require the use of other existing resources – land, borrowing capacity, local affordable housing funds (eg from s106 deals) and New Homes Bonus.  These should already be committed to affordable housing provision.  At best this seems like double counting and is more like a sleight of hand.
As a nationally conferred right, RTB sits uncomfortably with the Government’s commitment to ‘localism’.  Few if any local choices are available within the scheme and, given that local authorities are supposed to be in the driving seat of new housebuilding, the Government is reticent about placing the responsibility for replacing the homes sold at the local level.
Councils will not have any choice when it comes to deciding what type of replacement homes should be provided.  By central dictat they will be ‘affordable rent’ and not ‘social rent’.  Given that all of the homes that will be sold will be social rented, even if you accept the ‘one to one’ replacement argument it cannot be said that they are ‘like for like’.  The exclusion of the option to provide social rent is another step in its removal as a form of tenure and its substitution by the much less affordable and much less secure ‘affordable rent’ product.  CLG’s assertion that the provision of ‘affordable rent’ to replace RTB sales will ‘ensure that our ability to meet housing need is not impaired’ is highly questionable.  The misuse and indeed abuse of the word ‘affordable’ is getting worse every day.
The consultation runs until February and it is planned to introduce the new discounts through secondary legislation in April 2012 or shortly after.

0 replies on “RTB: not ‘one for one’ and definitely not ‘like for like’.”

I have only skimmed the impact assessment but it seems ti assume “like for like” in terms of distributional benefits, and secondly it says
108. However, not all replacement units will translate into additional housing supply. Some replacement units will be truly additional; but some replacement units will simply displace private supply. The ‘additionality’ of affordable housing is likely to change over time depending on local factors and current market conditions.
But nowhere does it examine the flaw in the proposal as being to reinvigorate the economy: that many who now buy (at the higher values that the cap removal predicates) might have bought in the private sector and through “filtering up/the chain” stimulate private housebuilding. It seems to me a fallacy that some of the “new” affordable units will take people out of the private market but the RTB purchasers will not.

[…] The Express and the Star, and also the BBC, which picked up the story, do not point out that when the Government talks about replacement with new affordable homes it means the misnamed ‘affordable rent’ product at rents that might be twice as high as social rents. So, as we pointed out in a previous post, ‘it’s not ‘one for one’ and it’s definitely not ’like for like’ &… […]

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