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Thursday, November 14, 2013

Welsh Tories set off up a uncosted housing cul-de-sac

The BBC report on a major Welsh Conservative policy launch today in which they seek to revamp or relaunch the 1980s Right to Buy initiative put in place by Margaret Thatcher. Unfortunately, the detail they have provided of this policy amounts to a triumph of hope over reality, with little idea of how they will meet its cost and even less idea of its impact.

The Welsh Tories say thatthe Right to Buy policy should be rejuvenated as only 420 tenants took up the opportunity last year. This could be because all most of the purchases that were going to take place have already done so, but also because the vast majority of new social homes are being built by housing associations, who apply different rules.

The most puzzling aspect of the policy though is the proposal to include a "one-for-one" initiative with a new home built for every home sold. There is no indication how this will be paid for, where the new homes will be built and over what timescale. What happens to other priorities for housing revenue account if the capital receipt is used entirely for new build instead of paying off debt or upgrading remaining stock?

Of course the big mathematical gap in their calculations is that the sale price of a single council house, especially when discount is taken into account, will not be enough to build a new property. My guess is that you might be able to build one home for every three sold. That means that new money will be needed to meet the aspirations of the Tories of a one-for-one policy. I look forward to seeing this costed in their manifesto in 2016.

Finally, the Welsh Tories are promoting this as a policy for all of Wales and yet only eleven local councils still have council housing stock. Their 'revamped Right to Buy' policy can only therefore apply in half the country.

This policy is big on ambition, short on detail and full of holes.
Does right to buy also apply to housing associations?

This sounds like an attempt to get Right to Buy back in Wales through the back door, by dressing it up as affordable housing.
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