Election controversy of the week: Cameron’s Right to Buy

On Tuesday, the Conservatives announced that they would extend the Right to Buy council houses at up to a 50% discount to tenants of housing associations. This discount would be capped at £102,700 for those inside London and £77,000 outside.

However, the National Housing Federation points out that housing associations "have borrowed well in excess of £60bn to build homes" and that this debt "depends on having an income stream (rent) to repay it". It estimates that it would cost associations up to £5.4bn and make it harder for thems to build new houses in the future.

In response to these criticisms, the Conservatives say that the councils will be forced to sell housing stock located in valuable areas. This will fund the scheme, while allowing councils to build some affordable housing in cheaper areas to compensate for the reduced social housing stock.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

However, Labour has pointed out that in practice, many council tenants will still need to be rehoused in the private sector. This will increase the housing benefit bill and eating into revenue from sales.

Overall, it's hard to disagree with The Economist, which has called it the "right to buy votes". However, it might not even succeed as an electoral bribe.

Fraser Nelson notes in The Spectator that those who "have had the temerity to rent privately" may feel "gutted" since they will be "excluded from Cameron's bonanza". Indeed, the polls suggest that while 34% of people support "Cameron's big bazooka", 39% oppose it.