Can I ask why council homes are ever sold at all?

[astoundedgoat]

www.theguardian.com/society/2017/jun/28/council-homes-sold-off-almost-three-times-as-fast-as-new-ones-are-built

My understanding is that there is a huge housing shortage, and that council homes are nigh on impossible to get, with huge shortages, years-long waiting lists etc. etc.

But why does Right To Buy exist at all? Why does the government ever allow any council to sell a single property, unless a council finds itself in the glorious position of having more council accommodation available than has been needed for the last x number of years?

I know (think?) this started with Maggie Thatcher, but I don't think I've ever heard a single person say "Thank goodness our local council is rapidly selling all its housing stock. There are plenty of council homes for anyone who needs them."

I have a bit of a commie streak in me, and feel that rental housing, transport and utilities, like education and healthcare, should be dominated by government ownership, with private being more of an opt-out thing, but I don't think it's excessively leftie to think that the govt. should hang on to resources that it obviously needs on an ongoing basis?

Firesuit, that's insane. Highest rents propped up by housing benefit? Why should the taxpayer line the pockets of landlords? Fair rent makes much more sense with significant reductions for keyworkers in all services such as NHS, care and education.

Essentially you are suggesting that the price of several things should selectively be set by government rather than market forces. This is based on the illusion that somehow that you can create subsidy without it costing anything. My alternative approach, where housing and key-worker wages are at market rates, and subsidy is only through housing benefit, is one where we do not lie to ourselves about the cost of anything, and money is better spend, because the increased transparency means it is more likely to go to the people we really want to subsidise.

My parents and my parents-in-law bought their council houses but I am still very much against it.

It should have been obvious that there would never be enough new ones built.

For a previous poster to say that they don't think anyone ever envisaged the crazy relative increase in house prices, or that there would be such a shortage of housing generally is ridiculous. A small country that is already overpopulated and yet people still carry on having 3, 4, 5 or more children! Of course there was always going to be a housing shortage which, in turn, would lead to ridiculously high house prices

but that house will always be ex council so more affordable for people to buy

This isn't true at all in big chunks of London, Toddlers

Some council estates were vastly improved by selling off the houses and that benefited everyone owners and renters. But I think the problem is bad in London where Council properties are being let at extortionate rents. There should have been a clause to stop this. I certainly don't agree with Housing Benefit propping up crazy rents.

Of course subsidies impact on the market. The more subsidy is given the higher the rent will go.

Firesuit, housing benefit costs around 25 BILLION a year, and a lot of that goes straight into private landlords' pockets.

I have seen episodes of Homes Under the Hammer where e.g. a LL has bought a house (usually up north) for relative peanuts, done it up cheaply, turned a small 2nd reception room into a bedroom, and is then seen gloating at the fact that courtesy of benefits he will be getting a massive yield on his outlay - I have seen 14% quoted.

How can it be right that this sort of thing is funded by the taxpayer, especially when public services are struggling?

Much of those billions should be put into building/maintaining good social housing instead. It would be so much better for the country in the long term, but the trouble is that all governments including Labour have largely been interested in the short term - whatever will win votes and keep them in power.

housing benefit costs around 25 BILLION a year, and a lot of that goes straight into private landlords' pockets. Erm... yes because they are the people who are filling the gap LAs do not. As they always have done! Private landlords are nothing new. It is only fairly recently that the need to own the house you live in has become a necessary thing!

Had the money from selling of all the housing stock been ring fenced then there would be a large pot of money to keep the social housing system, rents would be lower, as would house purchase prices. But, a s you said, short term, often Londoncentric, fixes by successive governments have left housing in a really weird state!

Mydog, I don't know how old you are but I am very likely quite a bit older than you, and it's certainly true to say that when RTB was first introduced, nobody - or hardly anybody - and I include financially savvy people in that - ever imagined prices, especially in London and the SE, rising to levels where a very ordinary 2 bed flat in a non fashionable part of London would regularly be priced at half a million plus, when in the mid/late 90s you could have bought the same for £100k or even rather less.

Much of the crazy escalation has happened since 2000, and even those of us who saw comparatively large, sudden prices rises in the late 70s/early 80s, also saw the prolonged slumps that followed.

Firesuit you version of events is what we have now. Thatcher dispensed with Fair rents acts, encouraged Right To Buy and didn't replenish the social housing stock. Subsequent governments did nothing to reverse her decision. Rents went up and up. Housing benefit goes not to the most needy but to their rich landlords. Money to those who already have money. How is this practical.
And for those (increasing numbers) who don't qualify for housing benefit, so much is spent on simply having a roof over their heads, that they have much less disposable income which means less money in circulation on the high street, less money going to light industries and we end up with the crisis of housing we currently have.

Can you explain to me how your version differs from what exists now and how it would solve the current problems, because I can't see how it would work.

Thank you very much for all your insight! The majority of comments have been fairly unanimous - it's extraordinary that both governments should have been unable to change what is going on, even when people in general seem to think that although it has its place, it needs heavier regulation.

Firesuit, housing benefit costs around 25 BILLION a year, and a lot of that goes straight into private landlords' pockets.

I strongly believe that the vast majority of that 25 billion should be going back to the local councils, not to private landlords.

Some form of right to buy wasn't a terrible idea at all, but only on the condition that:

(1) the discounts had been fairly modest, such that they represented 'good value' rather than 'a steal'; and
(2) the proceeds had been ploughed back into building more social housing.

What we got in the end was a complete nonsense.

Can I just point out that IF local councils were providing enough housing for those in need then the housing benefit would be being paid to them and not private landlords. Very few properties in my area rented privately fall within housing benefit so it’s a choice of being homeless (intentionally as far as the councils concerned) or making top ups on your rent out of benefit money. It’s hardly ideal for the tenant.

I believe what we actually need is a cap on how much landlords are permitted to charge for a room, a 1 bed flat 1 bed house etc to make it more affordable.

It’s very hard as a single person in London to even afford a room let alone a flat. Studios around my area built by a housing association were marketed at over £1000 per month.

When I first left uni I worked as an administrator for a company offering RTB mortgages. That was eye opening, to say the least.

The sad fact is that those who do buy their properties, particularly in London, will often cash out as soon as possible (I think 2 years is usual), and most of the people making £1m+ profits right now are developers, not even the original purchasers.

MadForlt

Right to buy no longer exists in Scotland. We never were big fans if Thatcher here...

didnt stop millions taking advantage tho

I believe what we actually need is a cap on how much landlords are permitted to charge for a room, a 1 bed flat 1 bed house etc to make it more affordable.

I have had this argument a few times recently... I only have one question: How would you do that?

Seriously, give it some thought... how do you see that beginning?

The main reason is because council houses are more likely to be labour voters and Thatcher's government decided that if people owned their council houses they would change their political views

The other problem for councils some of which are severely cash starved (and some when Labour introduced RTB but less so) was the cost of administering council accommodation eg, collecting and chasing rent, maintenance (especially for older or shoddily built buildings) and general administration. Yes, Thatcher believed in continuing RTB so people could take pride in their own homes (and would vote Tory) but there was also the problem as she perceived it that a significant number of people got substantial or key area council houses but didn't give them up when they earned enough to buy, thus blocking them from families in genuine need. Presumably she didn't want to ring fence the income from sales because she saw it as a problem for councils. I couldn't believe the Conservatives under Cameron and May were also advocating cheap sales of HA homes. Perhaps someone in the HA industry/councils can explain. Surely there must be some sort of algorithm that allows council house sales to include some sort of levy on appreciation? or stamp duty on further sale to go to the council, not the government?

Most of my town is ex council housing. It had a massive house building program during the 60s and 70s. I'd say looking at the properties available that a good 75% were council built during that period with a victorian centre.

My house is ex council. The first purchasers paid £3,600 for it as a rtb property. 2 neighbours are the original owners through rtb. My friends all own ex council properties. I understood that the money from the properties should have paid to build more council houses but there's little evidence of that here. Theres only a handful of houses built through the 90s and 2000s. Theres been a boom in new houses being built over the last 5 years but only a tiny portion are local authority/housing association.

I do think rtb needs looking at.