Housing Market Predictions and Right to Buy
News about the Right To Buy scheme
Just before the local council elections, Boris Johnson revealed the possibility of reviving the Right to Buy policy. The Right to Buy policy began in the early 1980s as part of Thatcher’s Britain. Millions of council properties were transferred into housing associations and occupants received the right to buy them, after several years of occupancy. The costs were heavily discounted allowing nearly two million households to get mobile on the property ladder. While was a great benefit, there has been little replenishing of the houses lost to the social sector. Controversially it has increased housing waiting lists and made eligibility for housing even more restricted. While many benefited immediately from this opportunity, it was not a scheme that intended to continue to create more housing for the sector it absorbed. While it is being proffered as election bait as means to aid the housing crisis for the next generation, it is still hard to say how that will take place.
Right to buy over the years
While the news is heralding the return of this opportunity, it was never actually unavailable. Council tenants have always been eligible to buy if their tenancies are secure. For houses, the discount is 35% if you have been a public housing tenant for three to five years. In London, the maximum discount is £116,200 and that can increase with the consumer price index. Discounts are evaluated based on each property, length of tenancy and the value of the property. The discount rises by 1% for every year you have been a tenant of public housing. At 70% this is capped, or alternatively if it exceeds the £116,200 maximum. For flats the discount is 50% and it rises by 2% under the same capping restraints. Discounts are subject to different factors including the costs of maintenance to the landlord. While Right to Buy has never been suspended in the UK, making the claims to revive it somewhat ambiguous, in Scotland it was suspended in 2016. The depletion of the housing stock was the reason, though under Tory governments that has never been an overriding concern.
Right to acquire
It has been suggested amidst the ambiguity surrounding this revival, that the government intends to extend the Right to Buy to Housing Association tenants, who are currently eligible for the Right to Acquire scheme. There are currently around five million people renting from housing associations in England. In the time of David Cameron there was a pilot scheme in the Midlands which offered similar discounts to the Right to Buy scheme of the 80s. This Voluntary Right to Buy scheme has less stringent conditions that the Right to Acquire scheme which is currently the only pathway for housing association tenants to buy their property. Restrictions within this scheme require that the property was built or purchased by the association after 31st March 1997 or transferred from council ownership to housing association after 31st March 1997. It is open for people whose properties are owned by the armed services and NHS trusts. Critics of the new proposed scheme wonder how this helps the 4.4 million in the UK who rent privately.
Housing association options in Bath
In Bath, there are several options for receiving help in buying an affordable new or existing shared ownership home funded through the government’s Homes and Communities Agency. What is required is a local connection, which is defined by certain criteria. A local connection entails having lived in Bath for 6 out of the last 12 months, or 3 out of the last 5 years. Permanent paid employment or voluntary work, or special circumstances, such as giving or needing specialist medical support or services in the area are also required. Housing association tenants can sometimes purchase their homes with a discount from the housing association. Landlords can provide information regarding eligibility. For more information
Race for Space in Bath
The “Race for Space” describes the movement in the market out of the city and into the countryside during the crisis of the pandemic. Increased appeal of rural spaces coupled with the tech explosion of virtual calling, meeting, and working means that the city model of before, is for some, redundant. What families want is to be closer to nature and to be able to settle into a different lifestyle. While this appears as a response to the crisis, it is also the development of a lifestyle trend that was in place pre- pandemic. However, local Bath estate agents say they could not have predicted the demand for out of town or village properties with space and large gardens. Space seems to be the main factor, as all over the UK interest in flats has plummeted. One agent says that in the city centre of Bath, what is most popular is modern property with space, particularly those built in the 1950s or 1970s which don’t require building consent and can therefore be further developed. The draw of the school catchment areas means that there will always be interest in Bath, and this will continue to grow.
Housing market stability despite predictions
The housing market shows no sign of crashing and the housing shortage means that properties are increasing in value and appeal in these regions. Wales has increased its annual growth in the market by 14.2 %, as its lower-cost houses and rural spaces generated huge appeal for buyers in the last years. Bath has enjoyed a steady stream of Londoners opting to live in its more rural setting, and still appreciating its urban attributes. What the “Race for Space” may result in is a distribution of wealth from London into more rural areas. With high earners, working from home in more rural areas, their affluence may generate more wealth in communities with a general trend of lower incomes. While Bath ranks high in the most expensive cities in the UK, it is not a candidate for any kind of radical redistribution, but in Wales, there is certainly potential for more affluence to influence its regions. Experts say that the annual growth of the housing market is going to lose its double-digit edge, but it is not going to crash. In April house prices increased by 1.1% compared to March. The factors which have been increasing the housing market are not going away, so there is no reason for the market to fall. Cheap credit, a housing shortage, the planning system and its bureaucratic restrictions, big developers buying land and not developing it. These factors, plus the “race for space” all make for a buoyant and healthy housing market, and Bath remains a very attractive and stable option.
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