Thursday briefing: Johnson is promising a revolution in home ownership. Will it work? | Housing | The Guardian

2022-06-15 10:56:55 By : Ms. wendy wang

In today’s newsletter: To win over a split party, the prime minister says he will expand right to buy – Thatcher’s hallmark if controversial housing policy – even though it’s almost certainly a bad idea

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Good morning. If you are a rabbit and you’re reading this sitting in a hat anywhere near Boris Johnson, First Edition’s advice to you today is: cling on for dear life. With the prime minister now displaying an existential interest in ways to demonstrate that discovering 41% of his own MPs wanting to get rid of him was actually a moment of triumph, the big ideas will be coming thick and fast in the coming days and weeks.

First out of the blocks today: a speech in Lancashire focused on ways to make it easier for lower-paid people to buy homes. Previews this morning suggest that Johnson will announce changes to the rules (£) to allow housing benefits to be used to get mortgages, and say he will accelerate housebuilding with new ‘flatpack’ homes. But the most significant offer is an attempt to recreate Margaret Thatcher’s election-winning formula by updating her trademark right to buy policy, extending it to properties owned by housing associations.

That’s the plan. Whether it works out is another thing. If you read today’s newsletter you should come away with a sense of the history of the right to buy policy, how this new iteration would work in practice, and why many experts thinks it’s a terrible idea. If you don’t, it’s not my fault, you’re a rabbit. Here are the headlines.

Cost of living | Boris Johnson’s attempt to reset his troubled premiership has received a double blow after petrol prices had their biggest daily rise in 17 years and a leading international thinktank said the UK economy would slow to a standstill next year.

Brazil | Authorities in the Amazon investigating the disappearance of a British journalist and an Indigenous advocate have yet to find any evidence of a crime three days after the men went missing. Police have made one arrest after longtime Guardian contributor Dom Phillips and Bruno Araújo Pereira vanished.

Crime | The Crown Prosecution Service has authorised the Metropolitan police to charge disgraced former film producer Harvey Weinstein with two counts of indecent assault against a woman in London in 1996.

Ukraine | Ukraine’s president, Volodymyr Zelenskiy, has said the battle for the eastern city of Sievierodonetsk will decide the fate of Donbas amid probably the most difficult fighting since Russia’s invasion began.

Art | Paula Rego, the internationally celebrated Portuguese-born British painter, has died at the age of 87. The director of the Tate galleries, Maria Balshaw, called Rego “an uncompromising artist of extraordinary imaginative power”.

Even though it’s more than 40 years old, the changes wrought by Margaret Thatcher’s right to buy policy can still be felt in Britain today. It established the story the Conservative party continues to tell about itself, of being crusaders for opportunity for all; it transformed the way people thought about what it meant to own or rent their homes; and it shifted almost 2m social housing dwellings into private hands. It became the emblematic policy idea of a prime minister who was pretty unpopular at the time, only to rule for another decade. No wonder Boris Johnson wants a piece of it.

No wonder, either, that he isn’t the first Conservative leader to propose extending right to buy to housing associations. But there are very good reasons that it hasn’t happened before. Here’s what you need to know.

What is the government expected to propose today?

In his speech to backbenchers ahead of the no-confidence vote, Boris Johnson promised that if he won, he and housing secretary Michael Gove would “be setting out plans to kindle that dream of homeownership in the hearts of millions who currently believe it is beyond their means.”

The proposed mechanism is to extend the right to buy to people living in properties owned by housing associations – not-for-profit bodies which rent low-cost homes to about 2.5 million people.

Crucially, housing associations are not state-owned. At the moment, people living in council properties can get a discount of up to 70% of the market value of their home, up to a maximum of £87,000, or £116,200 in London. There is a scheme in place for housing associations, but it limits the discount to a maximum of £16,000.

What did Margaret Thatcher’s model look like?

In his 2015 book Promised You A Miracle: UK80-82, Guardian columnist Andy Beckett writes that the 1980 Housing Act “envisaged a revolution in how a large minority of Britons lived”. It seemed possible, in part, because there was an abundance of social housing: 5.5m homes were provided by local authorities and housing associations in England, or 31% of the total stock.

Now anybody who had lived in council housing for more than three years would be entitled to own it. Tenants were given a 33% discount on market value at the three-year point, rising to 50% after 20, up to a ceiling of £50,000. And they were guaranteed 100% mortgages by the local authority. Against average property prices in 1980 of £23,500, it was an extraordinarily good deal for those able to take advantage of it.

How did it play out in practice?

Right to buy was a hugely powerful – even life-changing – policy for exactly the aspirational working-class voters who Thatcher was trying to woo. By the end of 1982, more than 240,000 homes had been sold to their tenants in England alone. But within a few years, a significant gap was visible between tenants who were buying and those who were not.

A government study published in 1986 found that buyers were “disproportionately drawn from the middle-aged and the better-off”. Their incomes were more than double those of people who remained tenants. Meanwhile, rents for the worse-off council tenants who remained rocketed – going up 55% relative to earnings in a decade.

What does the landscape look like today?

In the 22 years since the scheme was first introduced, 1,992,799 sales to tenants have been completed, the government says. Less than 5% of the homes sold off have been replaced, according to Shelter, and the available stock has dropped from that 5.5m figure to 4.2m by 2020.

Meanwhile, a large proportion of right-to-buy homes are now in the hands of private landlords: in 2017, Inside Housing magazine reported that 40% of them were being rented out, and their tenants were paying more than twice the rent charged by local authorities. Average property prices in Britain have gone from that 1980 figure of £23,500 to £278,436 as of March.

In other words, the 1980s right to buy generation received a huge financial windfall from the government, which accrued as the property market rocketed – and their successors are paying exorbitant private rents, up 15% in two years, because there’s no council housing to put them in. Scotland and Wales abandoned the policy several years ago.

Where does the idea of extending the scheme to housing associations come from?

It’s been around from the beginning. In 1982, the Guardian reported on proposals to make much the same change Johnson is proposing today – news which led the director of the National Federation of Housing Associations to complain: “Charities have a duty that lasts in perpetuity … it is vital to keep these homes for the old, the disadvantaged and the young in the future.”

The change never happened – but a version of the idea popped up in David Cameron’s 2015 manifesto, only to be junked after an unsuccessful pilot project in the West Midlands, which found that nothing like enough of the properties being sold off were being replaced with new stock – a red line for housing associations who were participating. (We might think of Nick Clegg’s claim that either Cameron or George Osborne once told him: “I don’t understand why you keep going on about the need for more social housing – it just creates Labour voters.”)

Could Johnson succeed where others failed?

Experts are sceptical. Gavin Smart, the chief executive of the Chartered Institute of Housing, says that the scheme is “not the answer” and would “be at the expense of the poorest households”, arguing that the estimated £70,000 subsidy per household would be better spent on addressing the housing stock crisis. And as Rob Booth says in his essential analysis, Theresa May’s former housing adviser Toby Lloyd points out that offering affordable housing tenants sale discounts could create tension with private renters.

Others point to the fact that … not many people living in housing associations seem to want this right very much. A report on the West Midlands pilot found that just 1.2% of households would be expected to buy under the scheme. Experts also note the fundamental problem – which is that the housing associations which own the homes have historically never welcomed the idea, and it would be extremely expensive to win them over.

In other words, the best hope for opponents of the policy is that it will never happen in the first place. And indeed, one report this morning suggests that internal estimates have priced a national version of the scheme at about £3bn a year, far in excess of an intended budget of £500m. That probably means any changes will be limited to more pilot programmes. Another Boris Johnson magic trick: a rabbit pulled out of a hat, which immediately disappears.

What do you think of plans to bring back right to buy? Have you benefited from the scheme – or would you take advantage if it was extended?

The Guardian letters desk would love to hear from you – email your letter of up to 300 words to or reply to this email.

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After pollster Chris Curtis (who made a cameo in yesterday’s First Edition) said that YouGov tweaked its 2017 polling methodology under pressure from the Conservatives, Peter Kellner’s piece sets out some of the anxieties and compromises that inform opinion research. Caveat emptor. Archie

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Cricket | England’s preparations for the start of the second Test against New Zealand on Friday have been boosted by the apparent recovery of spinner Jack Leach, who was suffering concussion after a fall in the first Test. But fast bowler Ollie Robinson is out for the series.

Football | Chelsea have told Romelu Lukaku that he will be allowed to join Internazionale on loan if the deal makes sense financially. Meanwhile, Liverpool are ready to pay £85m for Benfica’s Darwin Nunez but have rejected an offer from Bayern Munich for Sadio Mané.

Football | Wales fell to a 2-1 defeat against the Netherlands despite equalising in the 92nd minute through Rhys Norrington-Davies. Wout Weghorst restored the Netherlands’ lead 100 seconds later.

The Guardian print edition leads today with “Fuel cost surge and dire economic forecast shatter PM’s hopes of reset”. “£100 to fill family car” says the Mirror of the “petrol crisis” – the Telegraph says that’s the average cost of a full tank. The Financial Times has “UK growth set to be worst in G20 apart from Russia, says OECD”. The Times says “Johnson to let benefit claimants buy homes” while the Express leads with “Now that is a promise! PM vows to slash bills”. “Lawyers set to ground first Rwanda flight” is the top story in the Daily Mail which pinpoints “left-wing activists”. The Sun has “Kelly to wed” which is about Kelly Brook, the model. Metro has “No shame” which concerns the RMT boss, Mick Lynch, who was apologetic but uncompromising about the coming rail strikes. “Rail strike passengers face six-day shutdown” says the i.

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A bit of good news to remind you that the world’s not all bad

A farm in Kent has been using the lessons of Judaism to create a sustainable space based on trees, shrubs and perennials. The farm is markedly different to most other farms that are defined by people working the land. “We create opportunities for Jewish people and others to connect with nature,” says Talia Chain, the 33-year-old who runs the farm. “We’re trying to remind the Jewish community that environmentalism, sustainability and preserving the planet is a fundamental tenet of their faith.”

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