A guest posting by Anonymous, making some interesting points about the likely outcome of the changes in council house tenancies...
Am I alone in thinking that the revision in the whole council house business is simply a mechanism to accelerate the process of council house sales?
New tenants will not receive a council property for life, they will be regularly reviewed every say 5 years and assessed as to whether they still meet "needs" criteria. This happens naturally anyway as people, as their circumstances change, exercise the right to buy. The policy is dressed up as removing a small degree of inertia where people don't move on when they could do so.
There has always been a huge incentive courtesy of Mrs Thatcher to do so, as a tenant receives a substantial discount - this used to be 70%, but it is now a fixed sum of £26,000. As your circumstances change, if you are in a position to buy, you would obviously buy the house you are in for less than the market rate - particularly if the revised rents set to 80% of the market rent are either cheaper or within margins. A large chunk of the discount kicks in after only two to three years and the maximum is at seven years, meaning that the review is simply an exercise in forcing people's hand to buy at a five year point. Given the fact that the average person who lives in a council property and has remained so, will probably only see modest changes year on year in their circumstances, the chances are that by the time of any review they won't have a sizeable deposit to buy somewhere else (bearing in mind 100% mortgages are a thing of the past and the banks' criteria for first time buyers are much stricter). However banks will of course fall over themselves to lend to borrowers who effectively have a deposit of £26,000 as there will always be equity in the property in the event of a repossession. There is therefore a huge incentive to stay put and buy your council house.
Presumably as time goes on the policy will be extended to other council tenants once people have got their heads around the cessation of a house for life. The Telegraph turned their fire on inherited tenancies a few days back, so this could be flying a flag for a change there as well. When this is coupled to a lot of misinformation about how heavily subsidised council rents are (not very, economic rents go back to the 80's) designed to outrage the faithful, the reduction in housing benefit so that many people will have to make a contribution where historically they wouldn't have and the lowest interest rates for 300 years that aren't changing anytime soon, we see yet more picking fruit from the low branches. While Councils will be permitted to keep the proceeds of sale, Eric Pickles has announced the end to ringfencing, so there is a risk that this income will just go back into the central pot, with a general promise of new houses at some time in the future, rather than being committed for new building. Local authorities, facing their finances being battered will regard housing as just another asset to be flogged off to raise revenue.
An exercise in Cameron Underlining New Thatcherism.