Today there are 1.8 million people on the social housing list, an increase of 81% since 1997. The main reasons for this are:
A lack of social housing being built:
“In 117 council areas – over a third of the 326 in England – not a single social rented home was built in 2013/14” Shelter
‘Right to Buy’
Thatcher came up with the ‘Right to Buy’ scheme – allowing those in council housing to buy their council homes at below market value. In 1982 alone 200,000 homes were bought under the scheme and since then 1.5 million homes have been sold since then.
By selling off houses at a discounted, below market rate, councils are losing money – under the labour government it was estimated that it lost £4.5 billion – and it is getting worse: recent government changes mean councils can sell off their social housing for up to 70% less than their market value.
What is particularly galling is that when people buy their homes, they are allowed, after an initial period, to sell them off at market value, or, as has happened in at least 33 local councils, for owners to rent out their houses to people on housing benefit at private rental value.
So what is the answer?
The best thing to allow more social housing to be built is to lift the cap on council borrowing:
“one obstacle that could be tackled if government wanted to is the borrowing caps that were imposed when self-financing began. They stop many councils from making extra investment that could easily be paid for from their rental incomes” Chartered Institute of Housing
This would put councils on equal footing with private developers, and create enough social housing to meet the needs of the 1.8 million people in desperate need of social housing.
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