10 June 2022

Right to Buy cannot work without planning reform

As part of his great reset, Prime Minister Boris Johnson is expected to announce Right to Buy trials on housing association rented homes, an idea included in the 2015 Conservative manifesto. While not a bad idea in theory, in practice it will harm the housing association sector and ignores why it didn’t catch on in the past.

Rico Wojtulewicz, Head of housing and planning policy at the House Builders Association (HBA), the housing division of the National Federation of Builders (NFB), said: “You don’t inspire homeownership and get more than a million people off social housing waiting lists by tinkering around the edges, you do it with more homes and a coherent planning system. Yet the Government is rolling back on its 300,000 homes target, the levers which force councils to meet minimum housing demand, and the planning reforms which ensure housing associations and everyone else can build.

Like it or not, the solution is planning reform. Germany’s productivity is higher and placemaking better because of spatial planning. Japan’s house prices dropped because they upped supply. And SME builders, who build for all and train the workforce, succeed in other nations because planning is certain. When will the Government start to fix the housing crisis and stop targeting marginal voters?”

The HBA has always been active on social housing policy and after joining the successful campaign to remove the Housing Revenue Account (HRA) cap that councils faced when borrowing to build, it made five recommendations to the Government on how they could do more to build and retain social homes.

  • Increase the qualification period for Right to Buy on new homes, thus giving councils and housing associations greater certainty over their build costs.
  • Implement a Social Rent covenant, meaning all sold Right to Buy homes rented in the future are rented at social rent levels.
  • Utilise planning reforms to enable more social homes – A design code will help permission certainty but without supply ambition, nothing will change. The Government must not shirk reforms which stop councils holding back supply, so as not to upset a vocal minority.
  • Enable the myriad of funding models to build social homes – This would move us away from ‘grant as the only solution’ and enable Housing Delivery Vehicles (HDV’s), charities, HomesEngland and Registered Providers (RPs) to build.
  • Establish a government problem solving team to help councils overcome barriers.

 Wojtulewicz concluded: “There are innovative ways to increase or retain social housing, while also permitting more homeownership. The Government should have a sales caveat which ensures any sold Right to Buy home can only be rented at social housing levels. Increase the qualification of Right to Buy so that those selling break even on build costs. Reform planning so supply comes forward, and help councils understand the borrowing models out there, plus how to overcome their building barriers.

 

Right to Buy is a social mobility enabler but when it’s inaccessible due to lack of supply, it doesn’t just harm homeownership ambition and social mobility but SMEs who will build the homes, and the providers who struggle to make projects viable.”