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Shared ownership Right to Buy ‘will worsen housing crisis’, sector bodies warn
Sector bodies have said that proposals to offer housing association tenants the right to buy upwards of 10% of their homes could “worsen the housing crisis”, and warned the government to understand the impact on lenders before pushing ahead.
At the Conservative Party conference today, housing secretary Robert Jenrick announced plans to offer housing associations “an automatic right to buy a share of their home”.
New build homes would be automatically included, with existing homes added via voluntary agreements with associations, Mr Jenrick said.
But the National Housing Federation and PlaceShapers, which represent housing associations, warned that the proposals could have consequences for loan deals and make the housing crisis worse.
Homelessness charity Shelter added that the policy would "risk losing even more of the few social homes we have left".
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Kate Henderson, chief executive of the National Housing Federation, said: “We are concerned that these proposals could make it harder for housing associations to build new social rent homes. Our priority will be to ensure that any changes allow us to safeguard the country’s existing social rent homes but also to continue to build these homes for future generations.
“Lenders to the social housing sector view and value shared ownership homes differently to social rent homes. This announcement could affect not just the sector’s existing loans, but also the amount the sector can borrow in the future to build new homes.
“Any new government policy must not undermine the ability of housing associations to raise the vital funds needed to build new social rent homes, particularly at this time of already considerable uncertainty.
“Before the government proceeds with these proposed changes, it is absolutely critical they take the time to understand how the sector’s lenders may react and how this may impact on our ability to build new social rent homes.”
Sinéad Butters, chair of PlaceShapers, said: “Social housing is a diminishing and precious commodity which is vital to the infrastructure of our country and economy. Our concern is this could worsen the housing crisis if not linked to more investment in new social housing which in turn allows us to tackle homelessness, reduce waiting lists and support move-on accommodation.
“We know the aspiration for many is homeownership – PlaceShapers support people to fulfil this dream – but there are many millions for whom this will never be an option.
“We now need to look at the detail to assess its potential impact on many issues, such as building supply and the opinion of lenders on our ability to borrow to build more. We will be asking members to run this through business plans and looking at impact on valuations to inform this.
“It would be counter-intuitive if an unintended consequence meant housing associations could not service their debts or increase supply to help tackle the housing crisis.”
Helen Evans, chief executive of Network Homes and chair of the G15, said: “We welcome the recognition of the positive role shared ownership can play in helping people who want to own their own home, as part of a balanced programme.
“We are also keen to work with government on funding an increase in social-rented homes to meet housing need. A lot more detail will be needed to implement this announcement and we look forward to working with government, our tenants and other key partners in doing that.”
Polly Neate, chief executive of Shelter, said: “Research shows that 83% of social renters have no savings at all, so plans to extend the offer of shared ownership to new housing association tenants simply don’t add up. Worse still, this risks losing even more of the few social homes we have left – spelling disaster for the millions stuck on housing waiting lists.
“The government is in danger of missing a huge opportunity. Voters of every political persuasion have made it clear they want more social housing, not less. It’s high time the government listened - the only way to end the housing emergency is to build three million homes in the next 20 years.”
