In 1979, Margaret Thatcher was voted in on a Tory landslide with the ‘right to buy your own council house’ being a mainstay of Conservative policy. She encouraged people to buy their own council flats and houses, although it might interest you to know, that the council tenant-right to buy idea was first proposed in the late 1950s and formed part of the manifesto of the Labour party. Yet Maggie’s version was based on massive discounts for tenants and 100% mortgages (i.e. no deposit). However, the real bugbear was that half the monies raised from the house sales went to the central Government and the other half to the local authorities … but that money had to be used to reduce the local authorities’ debt rather than building new houses – so houses were being sold and not replaced.
681 council homes in the Bexley area have been
bought in the last 40 years (an average 17 per year)
Interestingly, the Tories relaxed the rules in 2012 for right to buy and raised the highest discount on a property to £75,000 (it has subsequently increased further, to £100,000, in some parts of the UK) meaning 62,114 council houses have been sold nationally since the rule change, raising £6.228bn since 2012 alone.
The issue, stated by many existing council house tenants, is that those tenants turned homeowners subsequently sell on their ex-council homes at a huge profit, meaning the demographics of those areas has become ever more transient, more specifically, properties that were once council homes are now owned by buy-to-let landlords who rent them out on a short-term basis.
Yet up to this point in time, nothing has been said about ‘other’ type of social housing – housing association properties. Whilst council houses are properties owned by the local authority providing low-cost social housing, housing associations also provide lower-cost social housing for people in need of a home, yet they are private, non-profit making organizations.
The Tory’s state one of the biggest divides in our British society is between those who can and cannot afford their own home, so plan to establish a new national model for shared ownership which allows people in new housing association properties to buy a proportion of their home while paying a lower/subsidised rent on the remain part – helping thousands of lower-income earners get a step onto the housing ladder.
So, what for the tenants of the existing 1,945 housing association households in Sidcup (or rather DA14 and DA15 to be precise)? The Conservatives have said they will work with housing associations on a voluntary basis to determine what right to buy offer could be made to those Sidcup tenants, although there are already existing rules which give most housing association tenants the right to buy their home, yet with only modest discounts of £9,000 to £16,000 depending on where you live. So, what does all this mean for the current homeowners and landlords of Sidcup properties?
All of the council houses sold in Bexley sold between 1979 and 1997. This really created waves in the housing market in the 1980s and was a contributory factor to the housing crash of 1987 when Dual-MIRAS tax relief was removed by Nigel Lawson. By selling off of council housing in those years they were accused of selling off the family silver cheaply, thus created the foundation of the buy-to-let boom of the early to mid-2000s, because of a major shortage of affordable housing being sold in the previous two decades.
Yet this time around, note Tory’s state it is just for new housing association properties, not existing. Also, tenants will have the right to go into shared ownership – NOT OUTRIGHT OWNERSHIP. This means this policy will have hardly any effect … unlike the Thatcher policies of 1979.
If you are an existing landlord with us (or even another agent in Sidcup) or someone thinking of becoming a first time Sidcup landlord looking for advice and opinion and what (or not to buy in Sidcup), one source of information is the Sidcup Property Blog http://sidcuppropertyblog.co.uk/ or drop me an email or phone call and let’s start a conversation – I don’t bite and I don’t do hard sell … and maybe, just maybe, I could help you get better returns from your property portfolio.
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Paul Long (Director & Author of The Sidcup Property Blog)