Tories Right to Buy for HA tenants is a scam

The Conservative’s policy of the Right to Buy for housing association tenants is a scam and a sham and it will devastate social housing for decades.  The proof of that came today in a simple tweet (below) and the instant I saw it the sham became obvious.

It takes some explanation so bear with me but here is the tweet:

portable discount rtbe sham

Kevin is only the messenger here and he is at the Voluntary Right to Buy Conference (#vrtbconf) organised by the National Housing Federation (NHF) with the government housing department the DCLG (@CommunitiesUK) speaking.

The government – and note AFTER this policy in the Housing and Planning Bill has been through parliamentary scrutiny – have decided to change the policy and in cahoots with the housing associations in a strategy more akin to despotism than democracy as it avoids such scrutiny.

The operative word in the tweet is “eligible” as what properties are eligible to be sold under the Right to Buy Extension (RTBE) to housing associations is determined by … the housing associations … and not by the law as is the case with council properties.

So take the social tenant in London currently paying £140 per week for a 3 bed flat and let’s call him John.  John is told by his housing association that his property is NOT eligible for the RTBE and instead he can have a portable discount voucher to use anywhere in the UK for his £104,000 RTBE discount.

John cannot buy his home but he could use the £104k voucher to buy another social housing property outright and £104k could afford a 4 bed house with front and back gardens in many places.  John would have to move yet he gets a property for nothing and has no mortgage or rent to pay.

The London housing association landlord gets this £104k from central government and the property that John vacates is re-let at the so-called affordable rent level of £340 per week by the housing association the day after John leaves.

The landlord therefore pockets £104,000 and receives an additional £10,000 per year in rent from what was John’s property and all for saying that for whatever made up reason that John’s property was NOT eligible for RTBE.

But that is only half the story reader, it gets so much worse!

The government gets this £104,000 from FORCING the sale of a council house property or properties in order to pay off the housing association landlord and so the social housing stock is decimated to do this.

All of this sham and scam hinges on what the housing associations say is eligible – and of course as I have outlined above there is a huge financial incentive for those housing associations to deem as many properties as possible as NOT being eligible for the RTBE!!

Of course the new tenant in John’s old property would receive this £340 per week in Housing Benefit too as – perverse as it may sound – this £200 per week increase in rent from £140 to £340 per week is fully eligible for Housing Benefit and so the taxpayer forks out this £10,000+ more per year too – for the same property (!!!) and the ‘welfare’ bill also increases.

In areas where the average private rent levels exceed the social housing rent levels, which is about 98% of the country, then this policy incentivises housing associations to say all properties are NOT eligible for the RTBE and (a) pocket the RTBE bung they have given to all John’s and (b) totally free to ramp up the  rent they charge the following week!!

Note – the policy is for housing association boards to decide whether or not to make a property eligible for sale and their decision alone.

What a fucking scam the government and the housing associations have come up with here to shaft the tenant and the taxpayer !!

____________________________

Update and in response to many comments below.

Firstly, a correction as Tim points out it is the receiving social landlord who gets the bung not the (non) selling landlord in this scenario.  Yet they do get the uplift in rent and Kevin is being disingenuous when he says the HA have to “fully justify the grounds for exempting it” or as I put it not making the property eligible for sale.

Further the (non) selling HA can uplift the rent to the AR level as Tim says and also Kevin’s argument in full that “…to fully justify the grounds for exempting it and hence it wouldn’t (shouldn’t!) be able to then change the tenure/use as it goes against the grounds for exempting in the first place” is a non sequitur.  The generally perceived reasons for not selling  / making the property not eligible for RTBE sale is that the property is needed to be rented still and the much higher rent levels that can be charged in AR gives HA’s the financial incentive to say and do precisely that.

There is also an incentive for London and other high rent area HA’s to persuade their social rent tenants to apply for RTBE, then refuse as property not eligible (which I remind is their choice) and then wave the social rent tenant away with his portable discount and then be able to the charge the much higher AR level on the Monday for what was the much lower level social rent the day before.  This will occur not just in the South East but also in pockets right across the UK such as York and Altrincham in the North that have much higher private rent levels than their neighbouring authorities and in many other places in the regions

What this does – to answer another of Kevin’s questions on Twitter but not above – is show how HA’s shaft social tenants.  The FORCED sell off of council houses, now all those of a “higher” value and no longer a ‘high’ value means from the outset of this voluntary deal the NHF knew their voluntary RTBE would reduce council housing stock and shaft council tenants and all social tenants by reducing the capacity of the social housing stock.  The NHF incredulously then said they were against this but only AFTER they proposed the voluntary deal and knowing the only funding for this was the forced sale of council housing.

Now we see an added incentive with the increase to AR rent levels which will see the social cleansing in high rent areas of the social tenant paying a social rent – so another way in which HA’s shaft the social tenant in this money grabbing scam.

There are some private issues I cannot reveal around the precept issue I mentioned in the comments.  Yet the issue has been around since the Housing & Planning Bill was first released and as I say below 36 of the 39 local councils in the North West region are NOT stock holding council landlords.

Discussions in parliament as well as privately have touched on this issue but – as per usual – just in the London context as (a) there are a far greater number and % of council landlords there and (b) they all have worries that their stock will be the first to be forced to be sold to pay for RTBE discounts.  Additionally they have stated publicly that why should a London council be forced to sell a council property to pay for a HA tenant in Liverpool’s discount?!

This is just another example of the back of a fag packet RTBE policy – and whether voluntary or not – as the government has yet to say where the discount is payable from for a NW HA tenant taking up RTBE.  The precept idea is still the only discussion in town for this and it was one of the first issues I raised when this sham of a scam deal first came to light yet most in housing were pre-occupied with the 6-day deadline the NHF gave its members to bother their heads about this seminal issue.

One last and small but important point I would take with Kevin’s fist response below. He says : –

The tweet I sent refers to a customer being deemed eligible and living in a property deemed as eligible saying they don’t want to but the house they are in but to take the discount with them and buy something else they fancy. This is only fair surely?! They have been given their opportunity to buy their home but don’t want to take it up.

This is only fair surely?  No!  This contrived option is not available to a council tenant under RTB or to a HA tenant under RTA and has been contrived for this pig’s ear of a sham of a policy only.  The ‘right’ to buy with all current and past cases is an entitlement ONLY to the property you are in and not to any property you may want to reside in any other part of the country.

In short this is a false and contrived premise based on this being an ordinary or usual ‘right’ of such entitlement.  What would be fair would be for the RTBE deal to be available to all HA tenants on the same basis and same criteria as councils tenants have enjoyed – just three years social tenure rather than the 10 years of this ‘voluntary’ and by definition NON right to buy policy.  That would be perfectly fair and equitable but I don’t hear any housing association calling for it do you?

I fully agree it would be a disaster for social housing but it would be fair and equitable.  It would also be fair if HA’s were not paid back the RTB discount too so as to make it fair and again equitable with the council housing RTB policy.  After all over half of all housing association stock is former council housing stock.  But that would be unfair on HA business plans you say? I agree yet HA’s are more than happy to f*ck over all councils and council landlords business plans, so is that fair?

The last thing any housing association can argue over the RTBE is it is fair in any way shape or form. Yet fairness has an entirely different meaning to housing associations than it does to council landlords …. a bit like “affordable!”

The NHF voluntary deal got the Conservative government out of a huge political hole as there was and still is NO WAY to fund the RTBE promise they made and did not by their own words expect to have to keep because they did not expect to have a majority at the May 2015 general election.

There is no way the government can afford the RTBE if the voluntary deal is withdrawn and there was never any way that this RTBE policy could ever have passed parliament without the voluntary deal which still has many loose ends to tie up and still remains a dog’s breakfast.

Unfortunately housing associations greed with the NHF as the puppet of the G15 got the better of them in their colluding with government to f*ck over council housing and the social housing model.

Who houses the vulnerable?  Not us we couldn’t give a stuff says Housing Associations, oops sorry PRIVATE Registered Providers to give them their correct name!

Now they are saying this deal is fair…

 

 

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One thought on “Tories Right to Buy for HA tenants is a scam

    1. Those council areas without council housing, eg all of Merseyside and 36 of 39 councils in NW to pay a precept as if they did have council housing!!! The farcical sham gets worse the more you unravel it!!

      1. Now if John is on Merseyside and wishes to stay on Merseyside, what does a Merseyside based council do? It will have to be assumed that a council house or two is sold from outside the area just to fund the cost of discount voucher. If a Merseyside based social landlord says “sorry no sell”. Does the council have to pick up the mess? How?

  1. The tweet I sent refers to a customer being deemed eligible and living in a property deemed as eligible saying they don’t want to but the house they are in but to take the discount with them and buy something else they fancy. This is only fair surely?! They have been given their opportunity to buy their home but don’t want to take it up.

    My understanding (bolstered by speakers today) is that a key driver behind the scheme for government isn’t all about home ownership but also about increasing supply hence the portable discount cannot be used on existing properties on the open market. It could be on a new build property already in the pipeline or another of the HAs properties or indeed another HAs property of they want to sell.

    The portable discount is only available if the property has been deemed as ineligible for purchase under VRTB. They are two sides of the same coin.

    You make an interesting point on the HA gaining off the rental stream. We have just been debating that in the previous session. This could certainly be the case in the South but in the North there is an unrecoverable deficit over the life of the business plan.

  2. Joe, lead me to the source doc please, I would hope only one landlord gets the discount bung, and if John isn’t buying from his landlord that landlord doesn’t get the bung. Though they do get the affordable rent uplift.
    As to non stock holding councils having to pay the precept, I’m unclear where that is proposed. But I’m sure you can enlighten the darkness

  3. Another point I should have made is that if the property has been excluded by the HA and therefore is the only situation where a portable discount would come into effect, the HA would have to fully justify the grounds for exempting it and hence it wouldn’t (shouldn’t!) be able to then change the tenure/use as it goes against the grounds for exempting in the first place.

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