The end of the Right to Buy in Wales

Originally published on March 13 on my blog for Inside Housing.

Wales is set to join Scotland in consigning the Right to Buy to history.

Readers in that country east of Offa’s Dyke and south of Hadrian’s Wall may want to look away as the Welsh Government introduces a bill into the National Assembly on Monday to abolish the Right to Buy, Right to Acquire and Preserved Right to Buy.

The aim is to protect social housing from further reduction and encourage the development of new social rented homes.

Approval seems all but certain even though Labour only has 29 out of 30 seats in the Assembly and governs with the support of the single Liberal Democrat member. The opposition Plaid Cymru, with 10 members, also had a manifesto commitment to end the Right to Buy.

The policy would end in Wales a year after Royal Assent, which would imply some time towards the end of 2018 on normal legislative timescales. In an additional measure designed to protect development programmes, the Right to Buy would end for new homes two months after Royal Assent.

Under the bill, the Welsh Government would have to inform local authorities and social landlords within a month of Royal Assent and they would have a further month to inform tenants. This would effectively give tenants 10 months to exercise their right, though they would only have to submit an application, not complete the purchase.

Scotland gave tenants two years after Royal Assent and experienced a spike in applications. The increase could be less marked in Wales for two reasons.

First, there has already been an increase in applications when the maximum Right to Buy discount was halved to £8,000 in 2015.

Second, the policy has effectively already ended in some parts of Wales. Previous legislation allowed Welsh local authorities to suspend the Right to Buy for five years in their areas if they could demonstrate compelling reasons.

Four areas have successfully applied for suspensions – Carmarthenshire, Swansea, Anglesey and Flintshire – and Cardiff is also seeking approval from the Welsh Government. Others, including councils that have done a stock transfer, could still follow suit if they wanted.

Wales lost almost half of its stock between 1981 and 2014 as 139,000 homes were sold off. As recently as 2006/07, Right to Buy sales were still running at over 1,000 a year but the total fell to below 200 in 2012/13, before recovering to 359 in 2015/16.

The country will continue to suffer the legacy of past sales for years to come but it is acting to protect the current and future stock of social housing.

Cabinet secretary for communities Carl Sargeant argues that abolition is a key part of its wider policy of creating 20,000 affordable homes by 2020.

However, contrast what’s happened in Scotland, what’s about to in Wales and what could happen in Northern Ireland (the abolition of the sales scheme for housing associations) with what is happening in England.

Though the rush to extend the Right to Buy to housing association tenants is for the moment paused pending another pilot, it remains a Conservative manifesto commitment along with the sale of vacant higher-value council homes to fund it.

Discounts are also up to 12 times higher than in Wales and the qualifying period is shorter.

Ministers’ noses continue to grow longer as they claim to be meeting their one-for-one replacement pledge. Even when you include the small print – it only applies to replacement of additional homes sold within three years and replacements do not have to be for social rent – the rate is one-for-six at best.

Gavin Barwell may say that the policy is only ‘politically justifiable’ if replacements are built but the numbers say something rather different. He is a slicker salesperson than his predecessors but the product he is selling is as defective as ever.

As Inside Housing reported two weeks ago, only £1.5bn of the £3.5bn-worth of sales since discounts were increased in 2012 has been spent on replacement homes. Some £1.2bn went to pay off councils’ historic debts and £800m went to the Treasury.

When even former Tory MPs like Michael Portillo are calling for more council housing, you can’t help but wonder what might have been.

As Steve Wilcox argues in the latest UK Housing Review, the Right to Buy has been the single most important housing policy of the past 30 years but it would have been possible to devise a policy that balanced rights for tenants with returns for landlords and sales with replacements.

Instead the government in England seems hellbent on the destruction of the value created in the past.