Tenants in pricey areas ‘need flexible right to buy’ home

COUNCIL tenants in some of the most expensive parts of the country have been priced out of benefiting from Margaret Thatcher’s “right to buy” scheme, a think tank has warned.

In a new report the free market Adam Smith Institute (ASI) calls for an overhaul of the policy to help those who cannot afford to buy their current homes even at the discounted rates provided by the scheme.

The ASI, backed by two Conservative MPs, says social housing tenants in the most expensive areas should benefit from a new “flexible right to buy” scheme. It says they should be given a grant equal to the discount they would be able to receive under right to buy, and use that sum to buy another home.

The money could allow the tenants to downsize and stay in the same area, in the case of cities such as London or Manchester, or to buy a house in a less expensive part of the country. Their previous home would be sold to fund the discount and raise additional revenue, the think tank suggested.

John Redwood, the former Conservative minister, said: “This is an imaginative idea that deals with the reality that in some places homes are very expensive, presenting a barrier to the first time buyer.”

Conor Burns, another Tory MP, added: “The dream of property ownership taken for granted only a generation ago is now a distant dream. This paper points a way that, for some, that dream could come closer to being a reality again.”

Under the existing scheme, council and housing association tenants can buy their homes with discounts of up to £108,000 in London, or £80,900 in the rest of England.

Margaret Thatcher’s right-to-buy revolution gave millions the chance to own their own home, revived the property-owning democracy and helped the Conservatives win four general elections. But times have changed and the Tories need new policies and a new language to speak to the 21st-century voter. Today, the absurd cost of housing in much of the country puts even homes including a discount out of reach, so the Adam Smith Institute (ASI) suggests a flexible right to buy. Tenants in expensive areas would get a grant equal to the discount they would otherwise receive and would be able to use it as a deposit on another property. They could downsize or move somewhere less costly.

This won’t solve the housing crisis, which is worsened by chronic under-supply of land and punitively high rates of stamp duty. But at least the ASI is thinking creatively about solutions that put power in the hands of individuals; the Government, which too often falls back on nannystate policies, must start doing the same. This newspaper has launched a campaign for capitalism in part because the Conservatives need reminding of the fundamentals of their philosophy, as well as what policies really win elections.

If the party is doing badly among younger voters it’s partly because they are frustrated that it has become so difficult to pursue the dream of homeownership. The Tories should stop flirting with interventionism and embrace pro-market solutions that reduce state dependency and give people what they really want: the dignity of self-reliance.