Right to Buy extension could erode supply of affordable homes, expert warns
There has been speculation that a range of new announcements could be made to help people on to the property ladder.
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Your support makes all the difference.Any extension of the Right to Buy scheme could risk eroding the supply of affordable housing further, according to a housing market expert.
Reports suggest Government officials have been considering how to help young people struggling to get on to the property ladder in England.
There has been speculation that Right to Buy could be extended for housing association residents and a wave of modular or “flatpack” homes could also be built.
The proposal for renters to be able to purchase their social homes at a discounted price is not new, and the bid to revive the plans has been pitched as being inspired by former prime minister Margaret Thatcher giving council tenants the right to buy in 1980.
But Lawrence Bowles, director of research at Savills, said: “Every iteration and pilot of Right to Buy has failed to replace the number of affordable homes lost.”
He said that if Right to Buy is extended further, the supply of affordable housing could be eroded.
Mr Bowles said: “This comes at a time when supply is already likely to fall, as housing associations switch their focus from building new homes to making their existing homes safe and more energy efficient.
“If the Government is serious about getting more people into home ownership it could consider extending Help to Buy beyond 2023.
“While the policy hasn’t been perfect, it has helped just shy of 300,000 households on to the housing ladder for the first time.”
Social housing with rents tied to local incomes is what this country is crying out for
Polly Neate, chief executive of Shelter, said: “The solution to the housing emergency is staring the Government in the face: a new generation of well-built, green social homes.
“Social housing with rents tied to local incomes is what this country is crying out for.”
She added: “The Prime Minister and his Government should commit themselves to building much more social housing before pushing ahead with any naive plans to extend Right to Buy that risk wiping out what little is left.”
According to recent figures from the National House Building Council (NHBC), the number of new homes being registered across the UK jumped by a quarter (25%) in the first three months of this year compared with a year earlier.
Homes are registered with the NHBC before being built so its figures are an indicator of the housing stock in the pipeline. The body has a 70% to 80% share of the UK warranty market.
A gummed-up planning process means many SMEs are struggling to survive
According to the NHBC, material and labour supply shortages are now being managed by housebuilders as “the new normal”.
The NHBC believes continued investment in skills and training is vital to bring on the next generation of housebuilders.
It said initiatives such as its training hub, which is focused on delivering high quality bricklaying apprenticeships, are starting to make a difference and getting skilled workers trained and on to site.
Inflationary pressures and the strain on household budgets may impact market activity, but continued strong demand is also likely to have an impact, the NHBC has suggested.
David O’Leary, policy director at the Home Builders Federation, said: “Housing supply doubled between 2013 and 2019, but a fast-growing tax and regulatory burden is threatening investment and a gummed-up planning process means many SMEs are struggling to survive.
“So we welcome the Prime Minister’s renewed focus on building more homes and helping households into home ownership and look forward to working with him and his ministers on making it a reality.”
He added that potential measures to bring forward more homes more quickly would be welcome, “but could be made more difficult to implement extensive and highly local criteria for design”.
It’s good news if the Government can truly deliver affordable, quality housing so more people who want to can get on the ladder
Tim Bannister, Rightmove’s director of property science, said: “The next generation of first-time buyers are currently being faced with house prices 56% higher than 10 years ago, and renters are seeing rents rise at the fastest pace we’ve ever recorded, so it’s good news if the Government can truly deliver affordable, quality housing so more people who want to can get on the ladder.
“Some of the biggest opportunities with a modular housing programme could be the speed at which the properties can be constructed given the record time at which homes are finding buyers, and the potential for the homes to be more energy efficient, with energy efficiency rising up the priority list of current home buyers.
“Although competition among buyers is now starting to ease, we’re still in a market where demand is massively outstripping supply in many areas of the UK, which has pushed prices to record highs.
“While better established in other countries, modular housing is lesser known in the UK and it is likely people will want to understand more about them before they gain wider mass appeal.
“Whichever direction the Government choose to go, the plan needs to be large scale across the UK to make a difference to the current housing situation.”
Russell Galley, managing director of Halifax, said in a housing market report released by the bank on Wednesday: “Despite the very real cost-of-living pressures some people are experiencing, the imbalance between supply and demand for properties remains the primary reason driving the continued climb in house prices.”