Extending the Right to Buy to housing association tenants is not a new thing for the Conservative Party.

It was in the party’s manifesto back in 2005, ahead of Michael Howard’s unsuccessful attempt to be prime minister.

However, the most notable attempt to bring it into play was under Mr Cameron, who promised that all housing association tenants would have the ‘right to buy’ within 100 days of his leadership, if he was elected.

The nationwide roll-out that Mr Cameron envisaged never materialised, instead there was a pilot scheme in the Midlands when Theresa May was prime minister in 2018.

Now Mr Johnson now intends to finish what Mr Cameron started.

However, like when Mr Cameron put forward the plan, there is some some trepidation from housing associations, not least because there has been no engagement from Number 10 on the proposals. 

“We’ve raised our concerns and have been in conversation with them about it, but we haven’t been formally involved or consulted and we weren’t asked to support the plans,” says Catherine Ryder, director of policy and research at the National Housing Federation (NHF).

Like many we have spoken to in the social housing sector, the NHF is not against the principle of the Right to Buy and supporting tenants into homeownership, but there were concerns about losing stock and how it would affect investment plans.

“For example, if you are going to invest in homes to make them more energy efficient, knowing you may have to sell them by law, that now makes that a lot more challenging,” Ms Ryder explains.

There are also concerns around the costs. Not only has the government committed to providing discounts for people buying their homes, but housing secretary Michael Gove confirmed this week that the government would fill the funding gap between the sale receipt and cost to build a new “like-for-like” home.

In a government-commissioned report assessing the Midlands Right to Buy pilot, it was found that a national roll-out could cost the Treasury £14.6bn over a decade. While this might be reduced slightly by the government’s plan to cap the number of homes to be bought in a year and create a waiting list, it will still mean huge amounts of taxpayers’ money going towards the scheme.

But it does not seem like the government has quite got to grips with exactly where that money is going to come from yet. 

When quizzed by Clive Betts, chair of the Levelling Up, Housing and Communities (LUHC) Committee, earlier this week, Mr Gove gave assurances that the money would be coming from “across government” and would not be hitting his department’s budgets.

When pushed further, he was unable to pinpoint an exact source and fell back on the old government failsafe of there will be more details in “due course”.

But Mr Gove did acknowledge that sorting this question out was imperative to get housing associations onside.

“We better crack on [with understanding the funding] because we can’t have conversations with housing associations that we would like, without them having greater assurance on funding that’s understandable,” he said.

Even if the money is found, there are important differences between implementing the Right to Buy for council homes, which are publicly owned, and housing associations, which are not.

Housing associations are private organisations and the assets they do own, particularly the social and affordable rent homes, are often used as security for huge loans worth hundreds of millions of pounds. 

Anything that impacts the make-up of the security could complicate agreements between lenders and landlords.

Matthew Walker, chair of PlaceShapers and chief executive of Leeds Federated Housing Association, believes it is a risk. He says that housing associations are seen as safe bets for lenders and anything that may impact the security of investment from the bank’s perspective will have an impact.

He adds that he has not spoken to any funders to get their perspective, but says that funders have not been keen on it in the past.

Gavin Smart, chief executive of the Chartered Institute for Housing (CIH), also points to the fact that there are many different financing agreements between lenders and landlords across the sector and that a solution that works for one deal may not work for another.

Anna Clarke, who previously worked for RSM and led its review on the Midlands Right to Buy pilot, said this wasn’t the biggest concern of housing associations in the pilot, as the asset value of the replacement homes is similar to those they replace, even if they are smaller. However, she did echo Mr Smart’s comments that financing arrangements can be quite varied and, as a result, may be an issue for some associations.

An issue for these financing arrangements may occur if the tenures change.

The Right to Buy pilot, the majority of social rent homes were replaced with shared ownership homes. With lenders traditionally less enthusiastic about providing loans with large swathes of shared ownership homes as security, due to the more unpredictable returns, this could be problematic.