Making Housing Affordable
but is due to economic factors that current social housing policies are exacerbating rather than reducing. Other urban areas would also be reshaped through these changes, in particular by the revamped Right to Buy which should help millions move into home-ownership. In less affluent urban areas in the North and Midlands where social tenants would find purchasing their homes cheapest and easiest, the introduction of the revitalised Right to Buy will help to spread wealth, reduce dependency, and create real housing incentives for social tenants. Working social tenants should, just as others are, be able to purchase a home for themselves and their families. These measures will help allow the millions of low income households that want to move into home-ownership to do so. In the long run, greater owner-occupation in these urban areas will reduce housing costs and spread wealth. These reforms offer a boost for parts of the UK that have been too long reliant on state support that does not promote private wealth – a situation that cannot, in the long run, be tenable.
Reform will generate long-term savings from not paying retired social tenants’ rents These proposals will also reduce the long-term liabilities of government as social tenants who become home-owners will not need to rely on Housing Benefit to pay their housing costs when retired. The cost of paying Housing Benefit for retired social tenants was earlier estimated at roughly £3 billion a year, and so if perhaps two-thirds of tenants own in the long run, this will save £2 billion compared with what all retired social housing tenants would otherwise cost. However, these long run savings are largely excluded from our calculations of costs and benefits, except for the last five years of the second decade after reform, when they would contribute £100 million in the first year, rising to £500 million in the final year.
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