Vince Cable, former Liberal Democrat business secretary in the previous government, said this morning he believed that communities secretary Greg Clark had finally “begun to get the point” that the policy proposal would “cripple” housing associations.
Speaking at the annual Association of Short Term Lenders’ conference in London Cable said: “I personally feel that we have terribly underperformed in [building more social housing].
“We are now desperately short of affordable homes and they are not being built. If we were serious about housing supply we would be giving councils borrowing powers to get houses built and we would be giving maximum security to housing associations.
“One of my main beefs with this current government is the damage they are potentially doing to housing associations. This proposal to extend Right to Buy to housing associations will cripple them.
“They will not be able to replenish their stock, they will lose their independent borrowing capacity and reduce the supply of social housing not increase it.
“Greg Clark has I think begun to get the point and is now offering the housing associations a voluntary deal in which they agrees sales with tenants without legislation. That could be enormously important for the future of social housing.”
Earlier this week the National Housing Federation put forward a voluntary offer to the government on Right to Buy and housing associations are due to vote on whether to accept the deal tomorrow.
Under the terms of the offer housing associations would be fully compensated for the market value of the homes they sell which the NHF said would allow them to build at least one new home for every one sold.
This would be much harder with a statutory Right to Buy of the 1980s model where the receipts are split between the vendor and the government and, in the case of stock transfers, local authorities too.
David Orr, chief executive of the National Housing Federation, said: “I’ve been a vocal opponent to the government’s original Right to Buy proposals, highlighting the many reasons why I believed it would only worsen our country’s housing crisis.
“That’s precisely why housing associations are taking this offer so seriously. It rights so many of the wrongs in the original proposals.
“Our offer depends on the government providing full funding for the discount, so that housing associations can replace the homes sold, but we have made it clear that it is the responsibility of the government to identify these funds.
“It gives us an opportunity to support a central manifesto pledge of a democratically elected government, help many of our tenants onto the housing ladder, and actually boost our housing supply while protecting that crucial independence which allows associations to borrow billions on the private markets to build more homes.”
He added: “Our voluntary offer makes a clear offer to tenants without ceding independence and without allowing government to sit where boards should be, making the long term decisions which are in the best interests of the organisation and its customers.
“This has become a particularly acute concern as it has become clearer that a statutory Right to Buy would lead to a very high probability that housing associations would be classed as public bodies, an outcome I will fight tooth and nail to avoid.”
A spokesman from the department of communities and local government said: “We want to help anyone who works hard and aspires to own their own home turn their dream into a reality.
“The NHF has voluntarily come forward with a proposal, which the government is now considering.”
DCLG added that the government’s manifesto commitment remains the same and said: “Housing associations will have the chance to comply with our Right to Buy policy. But if they fail to do so, we will bring forward measures to ensure they offer it to tenants.”
