Category Archives: right to buy
The government’s Right to Buy scheme was launched by Margaret Thatcher in 1980 to encourage council tenants to buy their homes. I was researching how it has evolved especially in the light of the rising demand for housing stock. There was an article in the Daily Mail on 27th August and it raises some issues.
The article writes: The number of homes sold through the government’s Right to Buy scheme is up more than a third compared with last year. Figures from the Department for Communities and Local Government show 2845 houses were built through the scheme between April and June this year. That is 31% more than the 2171 bought in the same quarter last year. London was the most popular area, accounting for a third of right to buy purchases. Nationally, councils made a total of £210.8 million from the sales in the past year, with an average £74,000 paid for the property. It is an increase of more than 60% from the amount raised through sales in the same period last year. Since the launch of the Right to Buy, around 2 million properties were sold in the following three decades. In 2012, the scheme was reinvigorated to offer discounts of up to £75,000 on properties to encourage tenants to buy. The discount was increased in March 2013 to £77,000 and to £102,700 for London borough tenants. ‘Council house building starts are now at a 23 year high’, says Brandon Lewis, Housing and Planning Minister.
The thing I find difficult to understand about the Right to Buy scheme is that councils are having difficulty finding homes for new council tenants, and yet then they build new council houses then sell them off. I can see that if tenants are then taking over the responsibility of looking after their houses this then saves the council money as it has less housing stock to maintain. This is a viable solution as long as demand plateaus soon, easing up on the currently escalating demand for new build housing.
Richard Butler Creagh
One of the largest house-builders in Britain recently dismissed fears of a housing bubble as it reported booming demand for its new homes. The House builders revenues jumped 21% last year after it sold nearly 12,000 homes and that is with sales 30% higher in the second half than the first. One of the rival companies also have record profits for the six months to the end of December so it seems that the industry is starting the new year in a really bullish mood. all this came as figures from the mortgage lender, Halifax, showed house prices had dipped 0.6% in December but are still 7.5% higher than a year ago.
The whole of the housing market has had a remarkable recovery after many years of stagnation boosted by increased mortgage lending and assistance from the state-backed schemes such as Help to Buy. Many people think that the revival has fuelled a housing bubble and this has caused the Bank of England to scale back the funding for lending scheme so it no longer applies to mortgages.
Some of the large house builders say they don’t think there is a bubble, they say they cover the whole of the country and think the pricing is stable across the board.
I think the main thing is that if wages increase inline with house prices there should not be a bubble, but as we know this is not the case so people buying property when interest rates are at record lows, it would not take much of an increase to make things very difficult for a lot of new home owners who are pushing themselves to all time highs in prices. One thing is for sure interest rates can only go one way at the moment, so as I have said in the past it is a good time to fix a good rate with your lender.