The English Private Landlord Survey 2018 – new insights for private renting policy

A new approach to the English Private Landlord Survey (EPLS) provides a much more in-depth and nuanced exploration of private landlords.

So, what are the insights and what are my personal thoughts on their implications for policy?

The landlord population continues to be dominated by individuals, non-professionals and those with one or a small number of properties (94% individuals, 4% companies, 2% other organisations). Only 4% of individuals view their role as a full-time business, 14% a part time business. And only a quarter ever belonged to a rental property organisation. Although almost half (45%) own just one property, almost half (48%) of tenancies are with landlords owning five or more properties.

Most were approaching or in retirement – 59% of individual landlords 55 years or older, 29% of tenancies with landlords 65 or older with a third in retirement. Landlord debt is relatively modest with 39% of individuals having no debt and 55% a Buy to Let mortgage. And for those with debt, the average loan to value ratio was 50%, with just 18% having a ratio of 70% or more.

There was considerable support for longer term tenancies with 40% of landlords and agents willing to offer tenancies of more than 12 months and another 38% willing if there was a break clause to remove problem tenants. 42% did not offer longer tenancies due to concerns about problem tenants with 70% encouraged to do so if it became easier to remove problem tenants. When asked about compliance with legal requirements, agents and larger portfolio landlords were more likely to have carried them out with landlords much more likely to not know if they complied. Those with least compliance were landlords with just one property.

Although agents were more willing to let to all types of tenants, both landlords and agents were reluctant to let to households on benefits. The main reasons were perceived risk of delayed payment or unpaid rent (69%) and that benefits would not cover the rent (63%). Over a quarter of landlords, though just 9.7% of agents, were unwilling to let to non-UK passport holders.

Although most landlords (72%) used a mortgage to purchase their first property, more recent landlords were less likely to have used a mortgage. Those landlords with more than one property, were less likely to have used a mortgage to fund their most recent purchase than those to fund their first property. And in terms of future investment, more landlords planned to reduce the number of rental properties or leave the business than those planning to increase investment. 11% of landlords (16% of tenancies) planned to increase the number of rental properties compared to 15% (23% of tenancies) who planned to decrease the number of properties they owned.

The main reason for divesting was due to legislative changes (61%). Buy to Let landlords were more likely to be divesting and to do so due to legislative changes, with 74% of those reducing the number of properties and 63% of those selling all, Buy to Let landlords. Company landlords were slightly more likely to be planning to decrease or leave the business compared to individual landlords.

So, what are the implications for policy?

Reforms to introduce longer term tenancies that ensure landlords are able to remove problem tenants, are likely to be welcomed and potentially willingly adopted by the majority of landlords and agents.

Resistance to renting to people on benefits is likely to continue or worsen as welfare reforms and Universal Credit in particular, are rolled out. If landlords and agents received greater assurances benefits would be paid promptly and some of the most challenging aspects for landlords were addressed, this could slow or reduce their unwillingness to let.

It is unclear whether the introduction of the “Right to Rent” policy has encouraged landlord unwillingness to let to non-UK passport holders. This is particularly concerning given private renting is where almost all migrants seek to be housed. Lack of clarity following the UK withdrawal from the EU may also exacerbate the issue. Better information on landlord responsibilities and clarity around immigration rules targeted at landlords (as opposed to agents) may better raise compliance and a willingness to let.

Although the private rented sector has seen substantial growth, in the last five years it has remained stable and fell by 162,000 households in 2017/18[1]. In addition to more landlords planning to divest than increase investment, a significant proportion of landlords are approaching or in retirement. Although the findings don’t include new landlords who might enter the sector, the findings suggest the supply of private rented housing is likely to remain sluggish or fall in coming years.

And changing investment is also likely to impact on the profile of landlords. The landlord population is likely to move away from multi-owning Buy to Let landlords and potentially away from company landlords. Although the growth of new single landlords is likely to slow, the large numbers of debt free single property landlords are likely to remain. So, a hollowing out of small to medium portfolio Buy to Let and company landlords. Although this changing profile might help achieve some concerns around financial stability (although debt levels were seen to be modest), it may be at the cost of compliance with legal requirements and efficiency as the profile becomes more concentrated in single property debt free individual landlords.

The EPLS 2018 has provided a much more nuanced and in-depth understanding of this diverse and multi-market and tenanted sector. The task now is to carefully digest these findings to inform a more nuanced and targeted approach towards policy interventions – for the benefit of landlords and tenants alike. 


[1] English Housing Survey 2017-18 https://www.gov.uk/government/statistics/english-housing-survey-2017-to-2018-headline-report

THE RISE AND CHANGING PROFILE OF THE PRIVATE RENTED SECTOR

Rising house prices has put homeownership increasingly beyond the reach of growing numbers of people.  As such, people are living in private renting for longer, resulting in a growing private rented sector but also shifts in the types of people living there.  In the last general election, many believed it was the disillusioned “private renter wot (simultaneously) won and lost it”.  As politicians’ scramble to court this group, just how much has the private renter population grown and how has the profile of the private renter changed?

There are a lot more households renting privately and they are increasingly families

The chart below illustrates the huge growth in the number of private renting households and the changing types of these households within this growing population.  In 2002-03 there were an estimated 2.3m households private renting.  Just over a decade later that number had almost doubled to an estimated 4.5m households.  And while in 2002-03 less than a quarter of (23%) of private renting households were families, by 2015-16 the number of households with dependent children had almost tripled to 35% of all private renters – an increase of over a million family households.     

Private renters are now less likely to be the youngest and more likely to be the middle aged or those nearing or recently retired

Although a lot has been talked about increasing numbers of young people renting privately, the chart below shows that over the last decade there has been very little growth in the number of youngest private renters.  In 2002-03 16% of private renters were less than 25 years old, however by 2015-16 this had fallen to just 10%.  Rising costs of renting are likely to be a factor in such households living longer and longer with their parents and not forming households.  The biggest growth in the number of private renters hasn’t come from young, but rather from the middle aged or those nearly or recently retired.  In 2002-03 just 18% or 419,000 private renters were also 45 to 64.  By 2015-16 this had almost tripled to a quarter of all such households, to over 1 million households.        

Private rented tenants are now more likely to be economically active with the sector now housing many more economically active households

In 2002-03, the private rented sector housed 1.5m economically active households, 68% of all private renters.  By 2015-16, given the growth in the sector the number of private rented households who were economically active had more than doubled to 3.3m households.  Economically active households now represent almost three quarters or 74% of all privately rented households.   

And those renting privately are living in their homes for longer

The chart below compares the profile of the length of time private renters have been living in their current home.  In 2003-04, 58% of private renters had been living in their home for less than two years.  By 2015-16 that had fallen to just 42% of all private renters.  In contrast, there was a significant increase in the proportion of private renters living in their home for two or more years but less than ten years.  In 2003-04 only 29% of private renters had been living in their home for two more years, but less than ten years.  By 2015-16 that had increased to 48% or by over 1.5m households.  On average, in 2002-03 private renters had been living in their home for 1.6 years, compared to an average of 4.3 years by 2015-16.

Many of these changes have been taking place gradually over the years, however looking back over the past decade we can see that the size and profile of the private rented sector is radically different to what it was in 2002-03.  Most of these shifts are driven by the worsening affordability of homeownership, with increasingly numbers of households reluctantly living in private renting for longer and unable to escape it.  Unless there is a significant improvement in access to homeownership these shifts are likely to continue.  The housing tenure of private renting is largely unchanged since the Housing Act 1988 when the assured shorthold tenancy was introduced.  The recent growth and change in the profile of the sector raises questions as to the extent to which this tenure is fit-for-purpose for the large numbers and types of households who are increasingly living there.

The cash for homes policy that never was

Back in 2014, when Alex Morton was leading policy in Downing Street, the government announced plans for a £3.5m project to pilot “Development Benefits” – financial payments to households with the aim of reducing opposition to new homes.  The policy would work by giving cash to households living near new housing developments, regardless of whether they were opposed or not to new homes, with the aim of easing or reducing opposition.  It is fair to say the policy was met with some scepticism and controversy by the sector.  In advance of the pilots, whilst working at the Department for Communities and Local Government (DCLG), I commissioned research with the University of Sheffield on households opposed to new homes and housing and planning professionals.  Specifically, we explored the extent to which such payments would likely reduce opposition to new homes. 

Two years on, it is good to see DCLG publishing the findings from the research following my FOI request.  Improving our understanding of the use of financial and other incentives to reduce opposition to new homes, is important, not just in the context of increasing housing supply and policies such as the Community Infrastructure Levey (CIL) – but it also has potential to inform other policy areas such as energy infrastructure and fracking, where financial incentives are being considered or used.

So, what did the research find?  Only 6% of households felt such payments would likely reduce their opposition new homes with a further 4% saying it “might”.  And those few who were likely to see their opposition reduce, tended to be at the weaker end of the opposition spectrum, and so less likely to actively oppose new homes.  However, most households were also opposed to the policy in principle, with 46% associating it with “bribes”, and that it would result in less money being available to address the issues they were concerned about – such as impact of new development on roads and local public services.  A number also felt it could divisive where some households were paid and some weren’t, where the payment boundary was set and in terms of the principle of using cash to changes people’s minds. 

The attitudes of housing and planning professionals were even more negative than households, with none of the 22 professionals interviewed saying they were supportive of the idea.  All were opposed in principle and in terms of the practical problems the policy would likely bring.  These ranged from a concern that payments would reduce trust in the planning system, that they could be divisive in terms of who did or didn’t get a payment, that they would undermine community relations, that they could reduce developer viability and that it could result in less money being available to address the impacts of development through existing mechanisms such as planning obligations.  All professionals felt that such incentives were unlikely to reduce local opposition and some felt the policy could do the reverse if local residents reacted badly.  What is clear from the research is that household opposition to new homes would likely reduce if residents were given a greater say in the design and layout of developments and if more money was made available to fund local public services such as transport, education, health and environmental facilities.

Rarely does one come across research with such unequivocal findings such as these that a policy is so strongly opposed in principle and in practice by both households and professionals.  In the end, the government quietly dropped the pilots on the back of the internal findings from this research.  The research has demonstrated, what many in the sector already knew, that it is the impact of development that is at the heart of local opposition.  And only by addressing these impacts through policy and programmes such as planning obligations and CIL and resources for affordable housing and public services, are we going to reduce such opposition, increase the likelihood of more homes being built and create communities that are sustainable and welcomed by local residents. 

The Housing Association Right to Buy – how to get out of a manifesto pickle

It was a Conservative manifesto commitment to extend the Right to Buy to housing association tenants.  However, under a May government facing continuing austerity and an expensive post Brexit Britain, it is a policy that the country can now ill afford.  The forthcoming election presents an opportunity to get out of this manifesto pickle.  But assuming the policy will not be entirely ditched – how should it be changed to ensure it is affordable and fair to the taxpayer, whilst still providing a viable route into homeownership?

Before we answer this, let’s consider the current council Right to Buy (CRtB).  The government’s own financial assessment of the policy[1], under the current discount rates, showed poor “value for money” for the public purse.  The financial costs to government from the policy and the related one-for-one replacement were estimated to be higher than the benefits for local authorities and only marginally less than the benefits for housing associations[2].  This poor value for money is in part driven by the much lower receipts the government receives from a much more generous discount regime.  Under the government’s “re-invigoration” of the policy in 2011 the maximum discount has increased to 70% or £103,900.  These higher discounts combined with rising house prices resulted in larger and larger financial benefits for those able to buy and lower per dwelling receipts than would be otherwise for the taxpayer. 

The chart below shows how, since the policy change, average cash discounts have risen by almost 150% to around £65,000 per sale[3], with average discount rates rising from around 25% to 45%.  At the same time, the number of sales increased by 410% to 16,223 by 2015/16.  Although such discounts result in substantial benefits for buyers, they also amount to a below market sell-off of public assets.  In just the last four years, cash discounts for sales to households have amounted to an estimated £2.6bn[4].  Particularly at a time of austerity, such large discounts raise questions about affordability and fairness – selling off states assets at huge discounts, whilst giving large financial gains to households who are already relatively well housed.    

So, what does this mean for the housing association Right to Buy (HARtB)?  Unfortunately, the government has not published a financial assessment of the impact of this policy.  However, we know, unlike the CRtB, the government will receive no financial benefits.  All receipts from sales will go to associations, and the savings from lower management and maintenance costs from sales will also only go to associations.  However, unlike under the CRtB, the government will face a cash cost of having to compensate housing associations for the discount.  On top of that, like the CRtB, the government will also face higher housing benefit costs over time if the stock isn’t sufficiently replaced.  So just how costly is the HARtB likely to be?        

Looking at the CRtB when it was introduced and taking into account higher house prices today and lower social housing incomes, we assume that 8% of eligible tenants take it up in the first five years resulting in around 68,000 sales[5].  The chart below illustrates the likely upfront costs to government for providing a 70% payment to associations to compensate for the discount when a sale is made[6] and the estimated average discount per household. We estimate the government would need to provide cash payments to associations of around £4.8bn over the first five years.  And this does not include the further 30% payment that needs to be made when a home is replaced.  To put this into perspective, this is roughly equivalent to the current total Affordable Housing Programme (£4.7bn).  At the same time, average cash discounts are expected be much higher than under the CRtB rising to £115,000 by year five.  At a time of austerity, can we afford such high costs for government whilst also giving substantial benefits to a lucky few?  So, what options are available to a conservative government to get out of this pickle? 

One approach is to reduce the number of sales by reducing eligibility period from three or more years to, say 10 or more years.  This would significantly reduce the numbers eligible and subsequent sales and the accompanying cost, however it will still mean that the value for money of each and every sale is very poor, and that this fewer number of lucky households will continue to gain substantially high discounts.  Another approach is to have a limited government budget above which sales would not be able to proceed.  However, this is a recipe for chaos as households rush to buy, with significant numbers likely to be upset at missing out when the budget runs out.  And again, it would not ensure fairness for the large discounts for those who managed to buy in time.  There is a third option available – reducing discounts.

When undertaking a financial evaluation of the CRtB for the Welsh assembly, Professor Wilcox[7] found that a balance could be struck between maximising sales and ensuring value for money.  He found if discounts were set within a range of 30% to 35%, reasonable value for money to the public sector could be assured.  Now we have shown that the value for money of a HARtB will be much worse for a number of reasons, however assuming we reduced the HARtB discount to a still generous average discount of 30%, and that these lower discounts reduce the number of sales by a quarter, the chart below illustrates our estimates of what this would mean in terms of costs to government and average discounts per household.  We can see that total costs to government over the five-year period would fall by over a half to a still sizable £2.3bn, whilst the average cash discount would fall to around £60,000, much closer to the (albeit still historically high) average rates being achieved by the CRtB.  And though less households will be able to buy their home, a sizeable 51,000 are estimated to still be able to do so.  So, reducing discounts would ensure the policy was substantially more affordable, whilst ensuring average cash gains to households were more in line with the CRtB and maintaining this route to homeownership.          

The HARtB may well have been written up by a conservative party that did not expect to win a majority, and as such expected to trade away the policy under another coalition government.  However, when, against the odds, the conservatives got in, this expensive manifesto policy was well and truly in the pickle jar.  Looking towards a possible further conservative government, only by reducing discounts is this policy going to be affordable and deliverable and bring about greater fairness at a time of continuing austerity – whilst still delivering on the policy and ensuring a new route to homeownership.  Though Theresa May is likely to keep her powder dry on the detail in the forthcoming manifesto, another conservative government would do well to grasp this opportunity to get out of the Right to Buy pickle. 


[1] See DCLG Impact Assessment Reinvigorating Right to Buy and One for One Replacement (2012), DCLG.  Note that the actual agreed policy was even more generous with higher maximum discounts than modelled under the IA. 

[2] Over a 30-year time period

[3] DCLG Live table 682

[4] Estimated by multiplying average discount by number of sales in Live Table 682, 2012/13 to 2015/16

[5] Based on expert views and National Housing Federation estimate of 850,000 eligible households.  10% of eligible tenants took up the CRtB when it was introduced.    

[6] Assuming house prices rise at 5% (as per OBR), same average discount as for CRtB and an expected take up profile.  This is likely to be a significant under-estimate given housing association homes are on average worth more than council homes.  The chart accounts for just 70% of discounts being paid out, as the remaining 30% is not paid till stock is replaced.

[7] A financial evaluation of the Right to Buy (2008), Wilcox

How do we build our way out of the housing crisis? It’s harder than you think

Like any market, house prices are determined by supply and demand.  However, the housing market is unusual because the large proportion of supply is the resale of existing homes.  Because most sellers of existing homes are also buyers, the resale impacts on the supply and demand for housing.

Why does the resale of “second hand” homes matter?

When an existing home is sold the seller usually needs to buy another home to move into.  So, a resale results in an increase in supply, but also usually results in an increase in demand when the seller then purchases another home.  Most sellers, having seen their incomes and /or equity rise, will trade up to a more expensive home.  A re-mortgage that realises built up equity will raise the owners purchasing power, but it will also enable them to raise significantly more debt, further increasing their “effective demand”. 

The figure below shows that house prices have tended to rise and fall in line with resales over time.  Rising prices give more confidence to owners to put their home on the market, bringing more supply onto the market, but also more demand as sellers release equity and leverage debt to buy.  Resales matter because they tend to push up prices. 

How are resales different to the sale of newly built homes? 

When a newly built home is sold no household is displaced or needs to buy a new home as the result of a new sale.  Unlike a resale, when a newly built home is sold it only increases the supply.

The figure below shows sales in England and Wales from 2000 to 2015, split by newly built and resales.  We see the proportion of sales newly built has remained within a narrow margin of between 7% and 15% (with the exception of the crash of 2008).  By the end of 2015 only one in ten homes sold was a newly built home. 

So, what does this mean for the housing crisis?

Experts estimate we need to be building around 220,000 homes a year in England just to meet newly arising need.  In 2015/16 we built less than 140,000 new homes.

But the crisis is all the more challenging in a market where new supply represents only one in every ten homes sold and where demand is further increased when existing homes are sold.  The number of resales in recent years has been on an upwards trajectory.  Although changes to stamp duty and other issues appear to be slowing transactions in London, there is a good chance resales will generally continue to rise – and certainly to substantially outgun new sales.  Demand will continue to exceed new supply and existing owners are likely to continue to enjoy the lowest mortgage rates in history – increasing further their ability to raise debt.   The only way to reduce or compensate for the additional demand from resales is to further increase the number of new homes.  This means increasing the ratio of the new build homes to all house sales.

We face a huge housing crisis, and it is made all the more challenging through the further upward pressure on prices from resales.  In the absence of lending reforms or practice, it is only through the building of more new homes that we can begin to make up for the undersupply of the past and meet the need of the future.  But crucially we also need to increase new supply – and increase the number of new home sales as a proportion of all homes sold – if we are to also compensate for rising demand brought about by the resale of existing homes.

Taking on the Nimbys – good for the nation and good politics

It was encouraging to see housing and housebuilding in particular given such a high profile by both Theresa May and Savid Javid at the Conservative party conference.  The launch of the Home Building Fund, the “Accelerated Construction” scheme and a new push on brownfield regeneration hopefully marks a shift in government policy away from demand side and towards supply side subsidies – addressing the cause rather than symptoms of the housing crisis.

In addition to the need to support small and medium sized developers, and for developers to do more to build out planning permissions, Savid was also right to raise the other great obstacle to housing supply – NIMBYs.  Specifically, that “too many of us object to them (new homes) being built next to us.  We’ve got to change that attitude”.

In recent years there has been a huge shift in public opinion away from opposition and towards support for new homes.  In 2010 the British Social Attitudes (BSA) Survey showed more households opposing than supporting new homes, with 46% opposed to “more new homes being built in their local area”, compared to just 28% who were supportive.  By 2014 this had flipped completely with just 21% now opposed to new homes and more than twice as many or 56% supportive of more new homes[1].

How public opinion influences planning permissions on the ground often comes down to local party politics and the profile of the local constituency.  We know from the BSA survey that public support and opposition to new homes varies significantly by voter intentions.  The figure below compares public views on support or opposition to new homes against the party they were likely to vote for in 2014.  We can see that those likely to vote labour were the most supportive of new homes (65%), followed by those likely to vote for the Lib Dems (55%), the Green Party (50%) and lastly those likely to vote for the Conservatives (just 46% supportive of more new homes with 29% opposed). 

Although at the local level, pressure to block and delay planning permission can very much be influenced by the political profile of the constituency, things are very different at the national level.  Theresa May is clearly making a move to take the centre ground in politics in setting out her agenda for “a country that works for everyone” and clearly she has the outcome in mind of a Tory majority government in the next general election. 

In terms of housing policy, confronting the NIMBYs and a big new push on housing supply are likely to be most warmly received by those most supportive of new homes – those most likely to vote labour.  Of course this strategy might also risk upsetting those most opposed to new homes – Tory voters – however, regardless of how upset they might be, they are unlikely to change their voting behaviour as a result and vote for Labour – a party with a stated aim of building even more homes, and more social homes to boot!       

Although it remains to be seen what plans the Secretary of State has for changing attitudes towards new homes and the extent to which they are going to push up housing supply, it is clear – in terms of national politics at least – a shift in this direction is a potential vote winner from the labour electorate and risks little in terms of losing votes from their existing supporters.  Pushing up housing supply is both good for the country and good politics!   


[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412347/British_Social_Attitudes_Survey_2014_report.pdf

The Right to Buy – taking the long view

Churchill once famously said “Those who fail to learn the lessons of history are doomed to repeat it”.  As we stand at the precipice of a Right to Buy for housing associations (RtBHA), it would be wise to take a pause and look back over the lessons from the council Right to Buy before we take the plunge.  That’s why Professor Alan Murie’s excellent and forensic book “The Right to Buy? Selling off Public and Social Housing” is essential reading for the housing association sector and policy makers alike.  Alan is the UK’s leading academic on the Right to Buy, having undertaken numerous studies into council house sales since the mid 1970’s.  This timely book takes the long view on how the council Right to Buy (RtB) has played out, what outcomes might result from a RtBHA and, learning the lessons, what changes could be made to the policy to improve the future outcomes from a RtBHA.  I recommend you all to read it, but for those who won’t, or would like a taster before they do, below are my insights and thoughts on what Alan’s book raised and how it might point towards some improvements to help avoid some of the pitfalls of the policy.

Alan provides a valuable understanding of the context at the time of the introduction of the RtB in 1980.  Following a substantial council house building programme the nation had never been so well housed.  Almost a third[1] of all households were living in rented public housing that tended to be more modern and of higher quality than the private sector.  Many council tenants were on higher incomes than those private renting and paid higher rents than those on regulated rents in the private sector.  This large public housing asset had very low levels of debt, having been largely paid off in recent years.  Alan highlights that there was a belief at the time amongst many Conservatives that the council housing sector had become too large, that it was crowding out the private sector and that a smaller council sector would stimulate the private sector “fill the gap” and increase investment.  It’s worth recalling that the Conservative Government attempted to include housing association homes in the legislation for the RtB (an attempt that was fought off by the House of Lords).  Unlike the recent “reinvigorated” council RtB and the RtBHA there was no commitment to use receipts to fund replacement – though Alan notes Heseltine at the time promised a Conservative government would build around 60,000 council homes per year into the future – a commitment that was clearly not delivered.  In subsequent years, successive Conservative Governments further increased discounts and widened eligibility to encourage additional sales.  These discounts were temporarily drawn back by Prescott in the New Labour Government post 1997, though of course were undone again under the “reinvigorated RtB” under the Coalition Government from 2012.  What will prove an interesting and value comparison one day, in contrast to England, both Scotland and Wales have moved over time to curtail and now effectively abolish the RtB.

So how did things play out?  Looking back, what emerges is the nature and size of impact of the RtB evolving and increasing over time.  The better off and long standing households bought first, buying the better quality stock more likely to be houses, larger homes, in rural areas and the shires and in better off areas with already high levels of homeownership.  These households tended to stay living in their homes after buying meaning there was a limited impact between their tenure changing.  However, in later years, younger households began to buy with sales moving more towards flats, smaller properties and urban areas.  These households were more likely to move home sooner after buying, bringing resales into the market.  Although this new source of housing stock for sale no doubt helped to support rising homeownership rates, many found their way into the hands of private landlords with Alan estimating that between 30 – 40% ending up in the private rented sector.  As council stock was sold and not replaced, the total stock of council housing (and social housing in total) continued to decline.  The vast majority of households housed in social housing are housed as vacancies arise (relets) in the existing stock (rather than from newly built homes) as households move home or die or “dissolve”.  As such, as the total council housing stock declined this pool of relets that would otherwise have been made available continued to decline meaning less and less households in housing need being able to be housed in sub-market rented homes.   More and more households in need who were increasingly becoming dependent on housing benefit spent longer and longer time on higher rents in private renting or temporary accommodation.

Looking back on the legacy of the RtB, although clearly the policy was highly beneficial for those households lucky enough to have bought (and spectacularly so in many cases), Alan paints a picture of a policy that over time has brought about a number of large scale detrimental structural impacts to government and society.  Instead of increasing social mix, through the type of homes sold and resales into private renting, the policy has brought about increased concentrations of deprivation.  By enabling better off households to leave and through a reduced social housing stock for new tenants the policy has brought about a “residualisation” or a more deprived profile of households living in social housing.  By reducing the available council housing stock and housing people longer in private renting and temporary accommodation the policy has helped to increase the costs of housing benefit.  Finally, the recent steep rise in the discount rates of this publicly owned asset has increasingly represented poor financial value for money to the taxpayer and a windfall to buyers.  Fundamentally Alan feels that the policy was largely pursued in isolation, with very little strategic thinking of the wider implications, resulting in a range of perhaps unintended consequences, which he believes helped contribute to the housing crisis that we face today.

Looking forward to the introduction of the new RtBHA, although again the policy is an opportunity for many more households to own their own home, the policy risks this time around are arguably greater than they were under the original RtB in 1980.  Unlike in the 1980’s when many felt the council sector had over-reached, social housing now houses around half of what it did then or just 17%.  We also of course face an unprecedented shortage of housing of all types and an accompanying affordability crisis.  Although a big improvement this time is a commitment from associations for replacement of at least one new homes for each one sold, Alan raises concerns that these may not be affordable to those in housing need and may not be provided in those areas and of the right size and type for those in highest housing need.  Exacerbating this shortage of social housing and in contrast to the 1980’s, this time we have a policy partly funded through the sale of high value council housing which, similar to the RtB, risks resulting in further concentrations of deprivation.

[1] 31.2% of households lived in council or housing association properties in 1981