Housing Association Right to Buy: Libertarian Dream Come True or Statist Nightmare?

The head of a housing association has threatened to sue the government if it extended ‘right to buy’ legislation. But just how ‘private’ is the property owned by these groups and is the policy compatible with a political movement aspiring to small government?

The policy, which would give tenants of properties owned by housing associations the right, rather than just the option, to buy out their homes in line with those who live in government-owned council houses, was outlined in the Conservative manifesto this week. Housing association bosses immediately hit back, as reported in an article by the Independent newspaper yesterday, claiming being forced to sell their property could ‘cripple’ them, and would breach Article 1, Protocol 1 of the European Convention on Human Rights – the“right to the peaceful enjoyment of one’s possessions.”

Adam Memon of the Centre for Policy Studies argues that not only would the policy have the opposite effect on housing associations, enriching and developing the groups, but it would also have the desired effect of increasing housing supply over time. Speaking to Breitbart London he also questioned the extent to which not-for-profit housing associations could argue their property was truly ‘private’.

Speaking of the funding arrangements which sees a large proportion of the income for housing associations coming from government, either through grants from the Homes and Communities Agency, or through rent paid as housing benefit, Memon said “for all intents and purposes housing associations are an extension of the government”. As they are part funded by the state but without ministerial oversight, housing associations in many respects resemble Quasi-Autonomous Non Governmental Organisations – or ‘Quangos’.

Memon said the policy wouldn’t impoverish or bankrupt housing associations – as claimed – as they would be receiving the full market price for the properties, a healthy sum in the present climate. If the money was invested in building new homes for future tenants, they could maintain a property portfolio or even grow, ensuring a good supply of housing in the rental sector, while increasing housing supply overall.

Writing in a City AM article published yesterday, he argued: “In effect, extending right-to-buy creates something from nothing. In the case of the vacant council properties, assets which are owned by the state will be transferred to families wanting to make use of them.

“Tenants who wanted to buy their homes but couldn’t afford to, meanwhile, will now be able to do so because of the discount on offer. Many low income families will become home owners – with all the benefits that entails. Increased home ownership is associated with safer and more stable communities. Families, no longer dependent on the state for their homes, are able to build proper roots in their neighbourhoods, and invest and think about the long term.

“For such an apparently positive policy, the criticism has been intense. The key argument seems to be that extending right-to-buy would reduce the supply of housing. This seems terribly confused. People’s homes don’t just disappear because families own them instead of the government. Yes, we all want to build more houses, but letting people buy the homes they already live in doesn’t reduce the number of properties in existence”.

Labour party figures who criticised the policy have also been called out for their apparent hypocrisy on the matter of the private ownership of homes. Lady Nugee, the tweeting Labour politician best known as Emily Thornbery who is seeking re-election in Islington South and who was condemned in the national media earlier this year for apparently snobbish tweets about the housing and decorating choices of working-class Brits again caused controversy yesterday, tweeting about the policy.

As the Daily Mail reports, she has a strong history with ‘right-to-buy’, having bought a London housing association property in 2007, which has since nearly doubled in value. The millionaire politico now rents it out privately – exactly the sort of thing she and her Labour colleagues are desparate to prevent other people doing.

Criticism has also been leveled at the attitude of some housing association bosses who have reacted with horror at the government attempting to re-establish the property-owning-democracy. Eighty housing association chiefs pocket salaries greater than even the Prime Ministers at £142,500 a year – and some earn almost half a million pounds a year. Not bad for ‘not for profit’.