To Buy or Not to Buy? This is the question!

In recent weeks the minister for The Minister for Communities and Tackling Poverty has consulted on modifying or removing right to buy & right to acquire. The Welsh Tenants held two events in Aberystwyth and Pontypridd to discuss the white paper proposals along with support from TPAS Cymru. Over many decades the social housing stock has been decimated as a consequence of the policy without the promised replacement of stock as intended.

Both the repeal of right to buy and the suggestion in the white paper to reduce maximum discount received mixed views from tenants and leaseholders. Tenants exploring the pros and cons of the legacy suggested that there were both benefits and drawbacks for communities.

In discussions, it was acknowledged that the Ministers intent was to stem the tide of sales that had reduced the numbers of available social homes in Wales. However they suggested a third option, that RTB earned discount be retained but used as a ‘deposit guarantee’ to access the private home buy market.

Under the proposal, social housing would remain social while families that could afford to purchase, but lacked the capital to meet a deposit, could realise their aspiration to buy. This would operate similar to the Home Buy Scheme but targeted directly at social housing tenants who were able to meet mortgage obligations.

The problem for some with Home-buy scheme it was explained was that it’s only available on ‘new build’ properties and this depended on where they were being built. Tenants suggested that they would like to buy ‘local’ and there was often little new build available close to existing family, networks or work.

As an idea, Welsh Tenants believe that social landlords could operate a scheme whereby they put up the deposit, and retain an interest in the property equal to the deposit value on purchase, thus enabling social tenants to move out of social housing, while keeping social housing for those in greatest need.

As some tenants suggested, this would be no different than social landlords providing interest free loans to leaseholders to enable them to meet their repair and improvement obligations under their lease agreement or having an equity stake in return. This is different than the shared ownership model where the equity value is shared but landlords retain a management interest with occupiers remaining as tenants.

Clearly there are tenants that believe that the RTB / RTA needs further exploring as a tool to enable tenants to be more economically and socially mobile, while RTB could be used as a helping hand onto the property ladder rather than as a means of diminishing social housing stock.

Others argued that given the inflated house price market this could be high risk for both the tenant and the landlord. But one that landlords and indeed owner occupiers are willing to take. We wait to see what happens as a result of tenants views.

Note: Due to the high volume of calls and emails regarding right to buy and right to acquire we have placed a link to the relevant documentation for people to download here:

Here is a copy of our response to the RTB/RTA consultation paper.

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