Graeme Brown: Right to Buy is spent, we need a right to build

For most young people, the notion of home ownership is a distant dream. A bold new initiative could change all that, writes Graeme Brown

For most young people, the notion of home ownership is a distant dream. A bold new initiative could change all that, writes Graeme Brown

Right to Buy [RTB] is the most significant housing policy of the last 40 years. It has been the real centre-piece of a housing transformation – from a Scotland of tenants, to a Scotland of home-owners. And as a tool of social policy it has done far more to alter the circumstances of some lower income households than any number of tax credits.

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So why on earth should we, in Scotland, be on the cusp of consigning RTB to the history books? Part of the answer is that it has created losers as well as winners.

RTB was introduced in Scotland in 1980 and operated largely unchanged for 20 years. Sitting tenants of public authorities had a right to buy their homes for a discount of up to 70 per cent for flats or 50 per cent for houses. The discount depended on how long you had lived there. While modernisation has slowed its impact, the overall consequences of RTB have been hugely popular.

The numbers are staggering – 490,000 social homes have now been sold in a nation of only 2.4 million households. For some households – not the poorest, but those on modest or below average incomes – it gave access to home ownership and to the accumulation of housing wealth that otherwise may never have happened.

But, for every new home-owner, others were left waiting longer for any kind of home at all. During the RTB era, homelessness numbers soared and today still remain at levels unheard of in 1980. Today, there are 157,000 families stuck on council waiting lists across Scotland. We’ve been selling far more social homes through RTB than have been replaced. It’s like trying to fill a bath with a dodgy tap and the plug left out.

The effects on individual neighbourhoods have also been double-edged. The best homes in the most popular areas sold first, leaving those who couldn’t afford to buy increasingly housed in the worst properties and the least popular areas. And RTB is undoubtedly poor value for public money – the discounts compared to the benefits are simply too high.

So, in my view, RTB has had its day. It is monolithic, not strategic, and rides roughshod over local housing strategy. Thankfully, it seems that the Scottish Government’s thinking is also moving in the same direction as, in a recent consultation, it asked if it was time to end RTB. As far as I can tell, that was the preferred option of most respondents.

I make no bones about believing that RTB, as designed and implemented, was not the best choice for those people who are now struggling to pay their mortgage – and these include many of the people my organisation now helps. But I do have a sneaking admiration for the sheer scale of its reach. Its ambition, while simplistic, was bold.

So, where are the bold policies for today and tomorrow? I want to propose a challenge – a prospect of borrowing the boldness of 1980 and applying it to what I’ll call “Right to Build”. The key problem in the housing system is seen as suppressed demand – that lenders are now being too cautious in providing mortgages to first-time buyers. I don’t share that view because I see the dire consequences suffered by people who took on more debt than they could possibly manage. A return to the 2007 conditions of lending is neither desirable nor sustainable.

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We need to find better ways of satisfying household aspirations without putting all our eggs in the basket that sees first-time buyers taking on over-loaded mortgages.

Partly, that is about making best use of our existing housing stock – hence the welcome ending of RTB. Partly it is about reforming private renting to make it a long-term option fit for families.

Much more fundamentally, though, we are not building enough homes to keep pace with demographic change. And we are expecting our existing homes to last indefinitely.

As hosts of the Scottish Empty Homes Partnership, we are 100 per cent committed to squeezing every last drop of value out of our existing stock but, at current building rates, a home will need to last 150 years. That’s not plausible, especially with some of our existing homes already proving difficult to adapt for the low-carbon future to which Scotland is headed.

Whilst there can be no magic bullet, we must do more to show that, together, we can end Scotland’s housing crisis for good. I know it’s not a good time to be calling for a bigger housing programme, but as a country we are building fewer than half the 35,000 new homes a year total the Scottish Government set as a target in 2007. At the same time, our building industry skills are being eroded and we are sitting on a massive and socially-corrosive problem of youth unemployment.

But if not now, then when? Is it not now, when the market is becalmed, that we should marshall the arguments, gather the evidence and make the required alliances for a programme of building and investment that matches Scotland’s needs?

And, in particular, do we have the imagination and confidence in our young people to direct some of that new building programme at unleashing their energy and talents? Given the right conditions – land, capital, training and support – we can turn that problem of youth unemployment into an opportunity, one which sees them not just build and refurbish homes but build and refurbish homes in which they themselves can live.

What can the private sector do to support young people into home ownership if the public sector could be persuaded to give everyone under 35 with a steady income the right to build their own home on public land? Can we forge a new partnership between the public, private and third sectors to provide hope for young people for whom the possibility of becoming a homeowner is increasingly a distant dream?

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People may not share my view on sales of public homes, or my views on what a house-building programme might look like. But I hope that people can share my belief in a programme that is as bold in 2012 as RTB was in 1980. It could be just as transformative in its own way, and might mean that, 30 years from now, we could be reflecting that Right to Build was the equal and fitting successor to Right to Buy.

• Graeme Brown is Director of Shelter Scotland. He will be speaking at the Council for Mortgage Lenders Scotland conference in Edinburgh today.