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Should councils sell off their best homes to build cheaper ones?

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 20 August 2012  |  Comments 15 comments

A think tank has suggested councils should sell off their most expensive homes and reinvest that cash into building cheaper ones.

Should councils sell off their best homes to build cheaper ones?

Councils should flog off their most expensive homes and use that money to build cheaper ones. At least, that’s the latest idea from the think tank Policy Exchange.

According to Policy Exchange’s calculations, more than 20% of social properties are valued above the regional median, with a total value of £159 billion.

By selling the top end properties when they become vacant, councils would raise £4.5 billion each year which could be used to build as many as 170,000 social homes a year.

The definition of an ‘expensive’ property varies on a regional basis. So an expensive house in the south east will be more costly than one in the north west.

The idea has already won favour from the Government’s Housing Minister Grant Shapps. However critics have suggested it will lead to a form of social cleansing.

You can read the full report here.

What do you think? Is this a good idea? Or will it push poorer people out of more attractive streets, possibly creating ghettos?

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Comments (15)

  • bobmattfran
    Love rating 58
    bobmattfran said

    I object as both a taxpayer and a council tax payer to sell off at a discount Public Housing so that buy to let speculators can make a quick profit. One of the reasons that there is a shortage of low cost housing is a direct result of selling of Public Housing. This think tank which is a supporter of the present governments insane policies of selling off the Public Services should do something useful for a change an keep its nose and greedy fingers out of Public property.

    Report on 20 August 2012  |  Love thisLove  2 loves
  • douglasbuchanan
    Love rating 9
    douglasbuchanan said

    Have we all forgotten Mrs Cohen and Westminster Council. This is in part another form of gerrymandering.

    Douglas Buchanan

    Report on 20 August 2012  |  Love thisLove  2 loves
  • Mike10613
    Love rating 600
    Mike10613 said

    When you come in after a night out, you carefully fold your best clothes. After an afternoon in the garden throwing them on the floor is acceptable. People have to have pride in some things. Some council estates are sh**holes and the people have no pride. This daft idea will make it worse. Sell off the best to your brother in law? Why not sell off the fancy new civic centres instead?

    Report on 20 August 2012  |  Love thisLove  2 loves
  • DaveDB
    Love rating 14
    DaveDB said

    When Labour governments built council houses after the war nobody worried that they would become ghettos then, what is the difference now, hindsight or just politics?

    Report on 20 August 2012  |  Love thisLove  0 loves
  • jedi44
    Love rating 31
    jedi44 said

    Before I retired a couple of years ago, I worked for a Housing Association that had only come to be by the mass selling-off of the remaining council housing stock. By the time that happened, the council had sold off most of the family-sized properties leaving us with one or 2-bed properties, mostly flats, and bed-sits (oops, sorry, studio apartments). We were also left with the right-to-buy hanging over us on all current tenancies at hand-over, so lost more every year. As the largest social housing provider in the region it was embarassing to struggle so much to home the average family.

    No social housing should be sold for any reason. As @bobmattfran has said, properties have not generally been sold to long-term tenants to live out their lives in, as was originally intended, rather to sell on at vast profits. Once the property is gone, it's gone for good.

    Report on 20 August 2012  |  Love thisLove  0 loves
  • Poorpensioner
    Love rating 36
    Poorpensioner said

    Who said at a discount?

    Why should somebody on benefits, possibly recently arrived in the country, be put up at my expense, in a house and location that I, with a University Degree and a long, paying in, working life, could never afford to live?

    Report on 20 August 2012  |  Love thisLove  1 love
  • ckbadger
    Love rating 2
    ckbadger said

    They should be sold off, but only at market value. The idea that social housing should be sold at a discount to someone living in subsidised housing (or their friend/neighbour/relative) to make a profit on, thus removing it from the system entirely, is absurd.

    Council houses should only be sold at market value, with a greater number of appropriate houses (in a more affordable area) being built from the proceeds.

    I'm sure I'm not the only taxpayer who finds it irritating that I could not afford to rent or buy a property near my workplace, yet unemployed people are living in this prime city centre location at the taxpayer's expense. There is really no reason why people shouldn't be housed further out of the city centre.

    Report on 20 August 2012  |  Love thisLove  1 love
  • Meanmachine2
    Love rating 37
    Meanmachine2 said

    I don't think that the right to buy should ever have been started as it has led to a total shortage of council housing ( now called social housing).

    However there seems to have been a total change of parameters for social housing tenants. In the old days before you could be a council tenant you had to prove that you were employed & were a worthy tenant. In London, vast areas were council estates & the residents had a real pride in their area even having best kept garden competitions & the like.

    Now about 60 % of social housing rents are paid by the DHS benefits & whole areas are ghetos of unemployed with not even pride in themselves.

    Therefore if the tenants expect the state to pay, I don't think they can complain when they have to move because the property they occupy has sufficient value that it can be sold to pay for two properties to be built in a less popular area.

    In Plymouth there is also a twist on the right to buy. A large estate of social housing is being redeveloped by developers aided & abetted by the council but it is interspersed with houses which people have bought as a right to buy. The house owners are being threatened with compulsory purchase but at such low prices they cannot afford to buy a house elsewhere.

    Report on 20 August 2012  |  Love thisLove  0 loves
  • MikeGG1
    Love rating 879
    MikeGG1 said

    According to the article, the idea is to sell them of as they become vacant. That implies that would NOT be sold at a discount.

    However, if it became policy, they would push down other prices and their own as well. I seem to remember that happened when Gordon Brown sold off our gold.

    Selling them off gradually would not distort the market. They would tend to be houses which were bought individually to house large families, so would consolidate the repair schedules.

    Of course the cost of building new houses would not decrease, they would go up because they would have to compete for builders, etc.

    Whar does need to happen is that tenants who do not need social housing should not be permitted to stay on. Some families have 4 or 5 incomes. Others have large houses because of large families, but their children have gone. They don't need social housing, or that size of property.

    Mike

    Report on 20 August 2012  |  Love thisLove  0 loves
  • Raingold
    Love rating 1
    Raingold said

    I agree with Mike, social housing tenants need to agree to move on once their circumstances change - single people living in 4 and 5 bedroom houses is not uncommon. If tenants are given a discount, there should be a sliding scale so when it's sold at a massive profit, the Council can claim a percentage back - I'm aware of lots of people making massive 3 figure profits & buying a subsequent property outright when they sell their council house- that can't be fair on those saving for years to get a mortgage while living in expensive rented accommodation in the same area.

    Councils also need to be careful when building in every available space (including school playing fields and flood plains) - the Community needs to have the infrastructure to deal with the increased population. Locally, classrooms are being added to most of the primary schools, there's shortages of most services and no money to increase the infrastructure - the different departments within the council need to get together and have a plan.

    Report on 20 August 2012  |  Love thisLove  0 loves
  • electricblue
    Love rating 643
    electricblue said

    Some fantastic council estates locally with a real mix of now privately owned and council properties which could be sold at very good prices. Houses with quarter acre gardens being rented out at just over £300 a month? Of course they should be sold off if possible. It does seem absurd that some council properties have several wage earners and three or four late model cars parked outside - how are we defining 'Social Housing' these days?

    Report on 20 August 2012  |  Love thisLove  0 loves
  • sketharaman
    Love rating 7
    sketharaman said

    Around five years ago, I went on the famous London Rock Music Tour, which started just outside the world's first Hard Rock Cafe in Piccadilly. On the way from the Green Park tube station to the boarding point of the tour, I got my first ever experience of walking through the upmarket Mayfair district after having read about the high cost of real estate in this part of London for several years. The tour van had hardly traveled half a kilometer when the tour guide pointed to a council estate just outside our window and said that Syd Barrett, the famous founder of Pink Floyd, used to live there in his early childhood. "Council Estate in Mayfair?". "Could Syd Barrett afford to buy a house in this neighborhood even at the height of PF's fame and fortune?" I must confess that thoughts like these did cross my mind at the time.

    http://sketharaman.com/blog/2007/08/26/london-rock-music-tour-now-with-pictures/

    Report on 21 August 2012  |  Love thisLove  0 loves
  • meldrewreborn
    Love rating 45
    meldrewreborn said

    For some time I've been banging on about supply and demnad and what keeps house prices at high levels - even if they're not quite at their peak just now.

    We need more housing in this country - otherwise housing will remain comparatively expensive. Whether its owned or rented doesn't particularly matter in my view, we need more of it. Rents are moving higher and higher because people cannot buy at the moment. This encourages those who have money to buy to let - but its all part of the same housing stock.

    So if a council property becomes vacant, it has a choice - it can let it again or it can sell it, providing a home to someone, or it can use the proceeds to fund the building of a new property built to modern energy efficient specifications to be let to another family. The latter route increases the housing stock by one the former method increases the housing stock by, er, nothing.

    Council and housing association letting is often at below market rates. This has the effect of making it likely that once a tennant is into a such a property, they are unlikely to move out. My own mother and MIL lived in their properties for 54 years and 61 years respectively, and continued to do so even when their economic situation was so much improved that they no longer needed social housing.

    Then of course there is the other factor that such housing is allocated according to need. Those who attempt to improve their housing situation within the private sector find that rather perversely they have decreased the likelyhood of obtaining social housing. Those who plead poverty, squallor and have multiple children at the drop of a hat appear to be rewarded. After WWII you were put on a list - eventually you got to the top of the list but in the meantime you got on with what you had. Nowadays many decent hard working people would never get to the top of the list.

    Yet the housing lists are massive - all because fundamentally the housing is of reasonable to good quality and its dirt cheap compared to the private sector comparator. And it'll stay cheap into the future no matter how your financial circumstances improve. I could cut housing waiting lists at a stroke - by substantially increasing rents. If the rents become burdensome, then the tennant claims housing benefit - that what happens in the private sector. And increasing rents would allow councils to improve their existing housing stock or to build new properties. Isn't that where I came in?

    Report on 21 August 2012  |  Love thisLove  2 loves
  • babyhk
    Love rating 8
    babyhk said

    I am fortunate enough to live in a good area with good local schools . The ex council estate nearby is all owner occupied . This means you have to be pretty wealthy before you can send your child to one of these good state schools . My children could not afford to live here so my grand children will not be attending these schools. The policy of selling of affordable council housing divides families and makes a good state education - only for the chosen few. We only hear about the rough council estates and the problems they bring. There are plenty of good honest people in a variety of housing. Their children deserve the chance of a good education and the choices which are sadly too often only available to those with money.

    Report on 17 September 2012  |  Love thisLove  0 loves
  • alexms
    Love rating 8
    alexms said

    In the south-east (especially London) there's hundreds of millions of pounds of desperately-needed government (ie, public/taxpayers') money tied up in 'loss-making' state-owned housing, and a similar amount being spent on private renting by councils; meanwhile there's whole suburbs standing empty in the great cities of the north.

    This is not only a huge waste of money (twice over), it also adds to the north-south price and mind-set differentials, discourages home-ownership in both (for opposite reasons), causes class tensions between the jealous and frustrated poor and the overtaxed 'scroungerphobic' middle classes, etc.

    The solution is to sell off the valuable property but to ring fence the money for jobs, infractures etc in the northern relocations, so as not to create a 'failed state' dump for the non-contributing poor. clearly this would take time, which would enable a natural balance to establish - the north would still need doctors, just like the south would still need plumbers!

    Report on 23 September 2012  |  Love thisLove  0 loves

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