The idea of owning your own home with no mortgage or rent to pay is every person’s dream no matter your social/economic position. Working class people work an entire life time to achieve it and social rent tenants often feel it’s an impossible dream.
Right to Buy allows most council tenants to buy their council home at a discount. You can get a discount on the market value of your home when you buy it if you qualify for Right to Buy. These discounts can often be above 35% allowing the dream of ownership to become a reality.
You would think it’s win-win for everyone involved, less people on social rent for the tax payers and people climb their way onto the property ladder being able to leave wealth behind for their children. However in this case the property is removed from the social rent market from housing associations and councils, leaving an ever growing gap in the number of affordable housing homes.
However, as the population grows from 64 million in 2013 to 68.35 million in 2023, the number of homes for social rent fell from 4.0 million in 2013 to around 3.8 million in 2023, based on data published by the Department for Levelling Up, Housing and Communities (DLUHC) and the Regulator of Social Housing. (1)
Between 2013 and 2023 a total of 93,875 social rented homes were delivered but 212,590 social homes were lost through sales (Right to Buy) and a further 58,772 were lost through demolition. This means overall there has been a net loss of 177,487 social rented homes over the past 10 years. (2)
Counterbalance Proposal
Our proposal is that Right to Buy Schemes should exist but in the form of equity rather than ownership of the physical property. This allows for council tenants to build equity while staying in the property they currently live in.
Once they decide to move out the property they can release the equity as cash to purchase another property but the Housing Association or Council retains the ownership of the home for future tenants.
If the tenant decides to live in the property until their unfortunate death then they will be able to pass down this equity rather than physical property to their children.
This model allows for wealth to be transferred and gained by council tenants but for housing associations/councils not to lose property in the long term.
Tenants would not get large discounts but would get a low interest rate mortgage with the government for their equity. Thus allowing them the opportunity to build equity and financial independence whilst the local authority has the opportunity to reinvest the funds into new housing developments or other community projects as well as maintain ownership of the property.
The main goal of this scheme would be get as many people on the property ladder without long term reducing the number of council houses and generate income to build more homes.
留言