The price of everything and the value of nothingPosted: April 27, 2017 Filed under: Land, Local government, Privatisation | Tags: Annington Homes, free schools, MoD Leave a comment
Originally posted on April 27 on my blog for Inside Housing.
Sometimes a conjunction of different news stories shines a new light on things and makes the obvious more obvious.
That’s exactly what happened this week when two excellent long read features on housing and a select committee report made me see familiar issues in a slightly different way.
The first was in Tuesday’s Guardian, an investigation by Holly Watt into the scandal of the privatisation of Ministry of Defence housing.
The big picture is that in 1996 the MoD sold its housing stock for military personnel to Annington Homes for £1.67bn and then rented them back at a big discount to market rates for 25 years.
That may have made short-term financial sense but the long term is a different matter altogether. The homes are now worth £6.7bn and the 25-year discount runs out in 2021. After that there is nothing to stop Annington charging full market rents.