An Investigation on the Change of Right to Buy Policy
The Right to Buy (RTB) policy was introduced in 1980 by the UK government aimed at strengthening the council housing business. For many years, the scheme has provided the United Kingdom citizens with a new structure for the sale of residential housing properties. The RTB is used for the sale of flats and houses with higher discounts and few exemptions. Despite the benefits that are associated with the Right to Buy policy over 36 years since 1980, there have been essential changes in the RTB policy aimed at helping tenants purchases apartments efficiently (Murie 2016). Notably, due to the modifications of the policy that have been implemented over time, the volume of sales and capital received has exceeded expectations, and policymakers in the UK hope that the system will continue influencing the public positively for the benefit of the future generations. Sprigings and Smith (2012) point out that the RTB has also brought changes in the council sector in terms of rate of sales, as it has led to the decrease in housing rates comprehensively.
In Norwich, the capital town of Norfolk, the Right to Buy policy gives the council tenants an opportunity to purchase their home at an affordable cost, and with a discount to the full market value of the assets. The premiums change annually, and it is applied to the buying price of the assets depending on the form of the property and the duration one has been a tenant in Norwich (Norwich City Council 2017). From April this year, the maximum discount that the RTB attaches to the housing buying business is £78,600, and this figure is expected to increase in the future depending on the change in the buyers’ price index (Norwich City Council 2017). In essence, the RTB policy in Norwich is changing, and this has impacts on the tenants buying the properties and the council selling their property. Therefore, this study will investigate the change of Right to Buy policy, and its impact on the Norwich Council’s development. For a detailed review, the study will examine the effect of the policy, number of houses sold in Norwich under RTB policy, and their cost. The investigation will also present the stock of Council Houses, re-let agreement concept, and the aspect of experience purchase as involved in the RTB policy.
Literature Review
Many scholars have reviewed the Right to Buy policy, with the primary focus being on the impact of the policy, its changes, and how the UK government is intending to use the system for social welfare and economic development. Sprigings and Smith (2012) cite that RTB has been one of the most debated privatisation policies in the UK, as the scheme transfers the responsibility of the people purchasing properties to their personal ownership rather to private companies. According to King (2010), the policy also denies the government the authority to manage the proportion of the public sector, especially when the tenants purchase the property as guided by the law. In a study completed by Disney and Luo (2015), it was noted that since the implementation of the RTB in 1980, the share of home ownership in the UK has increased with the number of the household registering a house under their name increasing daily. On a similar note, Disney and Luo (2015) posit that between 1979 and the early 2000s, the number of people with a home acquired through RTB increased from 55% to 70%. Hence, it is apparent that in a relatively short period, the RTB has brought a large-scale change in property ownership among the UK families, with research showing that the number will keep increasing.
Moreover, Malpass and Rowlands (2009) argue that RTB is seen almost as a human right policy, as it gives the public specific rights that will fulfil their desire. Consequently, Malpass and Rowlands (2009) point out that this has made the policy attract political attention, as it has been politically inviolable. Thus, many political parties have embraced the idea of RTB to the welfare of the public. Theoretically, research shows that the UK government and politicians have at one moment tried to control the RTB policy, which had mixed impacts on the public (Farrall et al. 2015). For instance, in 1993, the Conservative Government politicised the RTB issue by introducing a mortgage, so that the council tenants would not buy the houses under the full discount policy (Right to Buy 2017). This gave politicians an opportunity to control the buying and selling of homes in many parts of the UK. Therefore, the tenant would share the ownership of the houses with the local government until a person pays the full amount of the money quoted in the purchasing process.
However, politicians have as well influenced the success of RTB policies through their commitment (Lund 2016). Lund (2016) proclaims that the UK Conservative government has been involved in agreements with the National Housing Federation to voluntarily help the people of the UK buy houses under the RTB scheme. Harrison and Sanders (2015) reveal that the collaboration of the government with other parties to underpin the RTB system aims at helping adults under 40 years by offering them bonuses once they purchase a house under discounted prices as outlined in the RTB policy. From this context, it is clear that the UK politics has a substantial impact on the success of RTB, and if the scheme is to continue serving the people equally, the UK government should consider collaborating with other parties directed to succeeding the Right to Buy policy.
A common problem that may influence the Right to Buy policy is the aspect of fraud that may happen in the process of tenant buying a house. The Fraud Advisory Panel (2015) alludes that tenancy fraud occurs when another person who occupies a housing association or the council home, with the claim that the house is under his or her ownership. The UK local government has introduced new measures to strengthen the Right to Buy, and mostly curb the fraud activities that may occur in the process of transferring house ownership from one person to another (Callcredit Information Group 2017). The measures to control fraud in relation to the Right to Buy scheme include reviewing the background information of the person purchasing the property, carrying out staff vetting, and providing an important mechanism that can be used by the tenant buying the property (Nottingham Community Housing Association 2017). These measures apply when residents notice any unlawful concept within the process of buying assets (Fraud Advisory Panel 2015).
The Nottingham Community Housing Association (2017) proposes that in the UK, taking effective measures against tenancy fraud has been significant for the public, as both the council and tenants purchasing the property comply with HCA’s Regulatory framework and ensure that the staffs or leaders involved in the Right to Buy system do not misuse the public money. Other measures that are implemented to prevent tenancy fraud in the UK include removing some control from the landlord, which will make them avoid offering accommodation unfairly, and rent houses in a balanced way to every person who is in need (Nottingham Community Housing Association 2017). As such, the review demonstrates that fraud in the housing sector under the management of RTB can affect the tenant negatively, and for this reason, the UK government has come up with measures to ensure that fraud is not an issue that will lead failure of the RTB scheme.
Impact of Right to Buy
Due to the implementation of RTB in Norwich, tenants can now purchase council houses at a discounted market price. Apparently, purchase through RTB means that when a council house is sold, it moves out of the public stock of housing, and becomes registered under the ownership of the person who has procured the property (Disney and Luo 2015). This means that tenants in the UK as well in Norwich are getting the opportunity to buy quality houses at a low price. On the other hand, RTB has changed the size, nature, and location of public and social rented houses in Norwich City. This is to say that the RTB policy has contributed to a fundamental change in the overall tenancy programs and structure of housing in Norwich Town. Murie (2016) states that since the implementation of the Right to Buy scheme, the rate of sale of houses has increased across the UK; thus, many cities in Britain has changed in terms of structure, size, and nature.
The Right to Buy has positive impacts on the Norwich people, as it allows the tenant in the region purchase a home together with their family members if they have lived with them for more than 12 months. In this case, it can be said the Right to Buy gives the public a chance to purchase a house under joint venture or register the house with the name of their family members if they want to list them as owners of the property (Norwich City Council 2017). In essence, since the purchase of a home is probably the biggest financial decision that people can make, the Right to Buy scheme in Norwich is playing an essential role in relation to the making decisions about purchasing a house and who to involve in the ownership register.
Number of Dwelling Sold
From 1980 to 2015, more than 2.8 million council and occupied social households were sold in the United Kingdom under the guidance of the RTB policy. In this period, more than £58 billion was generated inform of capital receipts for the UK government (Marie 2016). In Norwich, houses are discounted with £6.7 million, which has made the city to record a tremendous sale of apartments under the RTB. Additionally, report published in 2013 showed that Norwich City had processed the selling of at about 200 homes through RTB. The Norwich Evening News (2013) highlights that in 2008, the Norwich City Council had sold 173 houses under the UK Government this project.
Property Cost
The cost of the housing assets under the Right to Buy in Norwich is friendly to the public, as the UK government maintains that through the program, it want to give all residents in the United Kingdom an opportunity to own a decent dwelling. Norwich Evening News (2013) states that the cost of the properties sold by the Norwich City Council is valued according to what the government earns from the business and what the buyer will save. As such, the value of some of the properties in the region is £16.88 million; but under the Right to Buy, the properties are being sold at £10.18 million. In areas such as Beatrice Road, the properties are priced at £165,000, although they are being sold at £90,000. The cost of houses in Part Avenue is 145,000; but under the RTB scheme, they are being sold at £70,000 (Norwich Evening News 2013). Consequently, due to buying houses at a discounted price, Norwich tenants have been able to save up to £75,000, and this has been a motivation for the people who want to own a home in the region.
The Stock of Council Houses
In the stock of the Norwich City Council homes, there a variety of houses managed by the association. The council focuses on maintaining the stock of council-owned social homes, as well as private owned properties, which the council use to house tenants whenever there is a need (Norwich City Council 2017). From a report prepared by Norwich Liberal Democrats (2008), it was noted that the Norwich Council have 160 houses in their stock, which would cost 17.2 million under the RTB program. On the other hand, the council has apartments that are managed by the housing association as part of its housing stock (Norwich City Council 2017). The housing associations are registered providers, who are given the responsibility of building houses, which are later issued to the public under the administration of the Norwich City Council.
Re-let Agreement
Before the execution of the re-letting programs, the parties involved should execute the practice under mutual consent. In the process of re-letting, documentation is necessary, as the practice includes a new contractual relationship between two parties that are abided by the law. In Norwich, the process of moving new tenants into their homes that they have bought under the aspect of Right to Buy is not long as it takes place after the tenant and the council cabinet have reached an agreement. Norwich Evening News (2011) express that Norwich City Council takes an average of 16 days to re-let tenants into their houses. In most cases, the re-let practices are executed between July and October. This is an improvement from the Council, as before residents would wait for more than 40 to 50 days, which would make people raise issues concerning the effectiveness of the Norwich City Council.
Stability
Since mid-1981, Norwich City Council has been a focus for intervention, with the Secretary of States in the UK, aiming at improving the city in all dimension. As the city heeds on becoming one of the best based on the local socialism and labour dominance, continuity and stability have made the city sustainable, especially in balancing the stock of relatively good quality Council houses that are distributed to the residents under the Right to Buy scheme (Forest and Murie 2014). The professionalism of its housing management has made the city to be considered as one of the developing regions in the UK. The pressing problem such as homeless people and the council waiting list are key to the stability of the housing business in Norwich (Forest and Murie 2014). The list of the people waiting to be issued with houses through RTB scheme is bigger than it would be expected, which made the Norwich City Council extend the Right to Buy programs, hence making the system more stable to meet its goal. In this context, it is clear that the concept of Right to Buy have significantly increased stability on estates in Norwich City. Evidently, when the Norwich City Council get involved in the sale of houses, the estates become more stabilised, than in the cases where stability is set to be brought by tenures and their neighbourhoods.
Experience Purchase
The Right to Buy policy has made Norwich Council sell the best properties to the affluent tenant settling in the city. Purchasers are likely to experience discounted properties that are of top quality and satisfying to their needs. The levels of discount on Right to Buy can be categorised according to the type of the house that a person is buying. For example, if a person is buying a house, the Council will discount the asset up to 35%, and in the cases of a flat, the discount is 50% (Norwich City Council 2017). In addition, buyers purchasing properties from the City Council will not experience arrears and repossessions, as they will own the property permanently once the transfer of the dwelling possession is completed.
Methodology
Secondary data was considered as the most appropriate technique for this research. Based on the nature of this study, literature available on the subject of the Right to Buy is used in the discussion, with the main sources used being the available journals analysing the same topic, textbooks, and the web page of the Norwich City Council. The analysis of the available data was done through a self-analysis, whereby the findings were summarised and synthesised to come up with the answer to the research question.
Analysis
The analysis for this paper is based on the context of the contribution of the Right to Buy scheme for the development of Norwich City. Based on the review that was made on different sources, it was established that the new housing program under the RTB is set to underpin Norwich City by making it one of the best towns in the UK. According to information presented by Norwich City Council (2017), through the development of new eco homes by the city leaders, the City Council is set to implement housing scheme in North Norwich, where flats and houses will be built. Through the plans, the economy of the state will grow, as well the life of the people staying in the location.
Furthermore, from the web page of the Norwich City Council, it was found that for the Right to Buy policy to enhance development in the City, most council tenants purchase their homes at a low price with enough discount for them to make some savings associated with the housing (Norwich City Council 2017). The introduction of the Right to Buy policy has a fundamental change in the levels of expenditure that the residents of Norwich were not making before the introduction of the scheme (Farral et al. 2015). In this case, the policy has redesigned the City Council, and the people now spend a little money with regard to procurement of houses. This makes them saves quite a lot of money, which is a development because they can use the money for other needs such as investment, and living a sustainable life. Norwich Evening News (2013) reported that that tenant in Norwich are saving more than £70,000 and the Norwich City government is keeping the profit made from the cash paid for each sale.
Conclusion
This paper shows that from 1980, the RTB rule has presented straightforward benefits for the tenants in the UK and the council governments within the UK cities. The policy has changed the ownership programs with regards to housing field, and it is also giving people the opportunity to save some money that they would have used to build a house. This means that the operation of the Right to Buy policy has brought social change in the UK, primarily relating to the council housing programs. Equally, from this study, it is noted that the level of the discount associated with the Right to Buy policy has a role to play when people in Norwich wants to purchase a house. The premium justifies themselves because reducing the discounts on the apartments through RTB sales has been the reason making buyers to continuing trusting the government in the RTB business. With no doubt, using the Right to buy has proceeded Norwich Council, and it has assisted the local authority to maintain the budget of housing without affecting the welfare of the public.
Recommendation
Thus, to protect the interest of the people in Norwich, it would be recommended that the government should consolidate with the housing association groups so that it can continue offering the residents useful services and selling properties of high quality. For this to happen, the City Council should focus on making the RTB less complex and make it generous for the city residents. In a case where a risk occurs while the City Council of Norwich works with a housing associate, both will share the outcomes accordingly.
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