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Conservatives’ Right to Buy pledge might only apply to 15,000 housing association tenants (20 April 2015)

Date: 20/04/2015
Duncan Lewis, Legal News Solicitors, Conservatives’ Right to Buy pledge might only apply to 15,000 housing association tenants

The director of Human City Institute, Kevin Gulliver, has said that the Conservatives’ election pledge to extend Right to Buy to housing association tenants would most likely only give another 15,000 tenants the chance to buy their home at a reduced rate.

Social housing publisher 24Dash.com reports that the Tory party manifesto suggested that, out of 2.5 million housing association tenants, an estimated 1.3m would qualify for discounts by having lived in their homes for three years or more.

However, initial analysis by the Human City Institute of the last national survey of 20,000 social housing tenants suggests that relatively few tenants would in practice be able to access the discounts being offered under Right to Buy.

Right to Buy discounts amount to up to £103,000 off the price of a local authority home in London and £77,000 for tenants living outside London.

Mr Gulliver says there are a number of reasons why the Right to Buy take-up among housing association tenants might not be as extensive as the Conservative Party has estimated – including the fact that one-third of all housing association tenants are retired and are therefore unlikely to take up their Right to Buy, even with the help of their children.

He added that housing association tenants also have predominantly low net-household incomes – with an average income of just £10,500 per annum.

Mr Gulliver said that 71% of housing association tenants earn less than £16,000 annually – and just 6% have incomes above the benefits cap of £26,000.

Moreover, fewer than 2% of housing association tenants have annual incomes exceeding £36,500.

Mr Gulliver points out that only 40% of housing association tenants have a household head in full-time work – and the majority of these tenants are in low-paid jobs.

A further 5% of household heads are in part-time work – with a growing number on zero hours contracts.

He added that housing association tenants in employment are also less likely to be longstanding tenants – unlike tenants who are retired.

His research also cites Land Registry house prices, showing that the average house price in England in February in 2015 was more than £180,000, with the average house price in London estimated at £464,000.

Most tenants would need to be eligible for a mortgage of more than £100,000 even with discounts, Mr Gulliver said. Furthermore, research shows that two-thirds of housing association tenants have no savings at all – and of those who do, only 7% have savings over £16,000, which is the limit a benefit claimant can have in savings.

The national survey of tenants also reveals that just 15% said that they would ideally like to be homeowners in the next 10 years (by 2020) – and only 2% thought that shared ownership would be the right option for them.

The survey found that three-quarters of social housing tenants wished to remain in their homes as tenants.

Duncan Lewis Housing Solicitors

Duncan Lewis housing solicitors can advise social housing tenants on a wide range of housing matters, including Right to Buy and Local Authority housing.

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