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England’s Right to Buy is a ‘strategic failure’

Paloma Kubiak
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Paloma Kubiak

The Right to Buy scheme in England has “become a strategic failure” and unless reconsidered, “will exacerbate inequalities”, damning analysis has suggested.

The Right to Buy scheme was launched in the 1980 Thatcher era with the intention of helping low-income households get onto the property ladder, by allowing most council tenants to buy their council home at a discount from market rates.

But the policy has led to an “erosion of the stock of social rented homes” and many have found their way into the unregulated private rented sector.

Currently around 40% of Right to Buy properties are owned by private landlords, but this figure is likely to rise, “undermining the ambition to boost home ownership”.

The damning analysis of the upcoming 2022 UK Housing Review also suggests the transfer of stock from social to private ownership “puts at risk government ambition for estate regeneration”.

The review’s analysis by Alan Murie, stated that the scheme has also come at a significant cost to the taxpayer. Higher rents have pushed up the taxpayer-covered benefit bill and added pressure to local authority waiting lists. It has also raised temporary accommodation costs.

Further, the cash value of the average discount in 2019/20 exceeded the total average rent paid over the previous 15 years.

It noted the average discount of 43% (13 years tenancy for a house or seven years for a flat, assuming maximum discounts had not applied) indicates that discounts received by some Right to Buy purchasers in England far exceed their cumulative rent payments.

Meanwhile, Right to Buy has had a ‘levelling down’ impact in rural areas where council housing was critical for low-rent housing for lower-paid households with local work and family connections.

As such, without a supply of council lettings, many of those who can’t afford to buy are unable to access housing locally or are limited to accommodation that “fails to meet their needs”.

Alan Murie, Emeritus Professor of urban and regional studies at the University of Birmingham, said: “If there had been a sufficient attempt to sustain investment in social housing and to reinvest capital receipts in social rented homes, the impacts of Right to Buy could have been offset. The problem has not been Right to Buy as such, but because Right to Buy has continued alongside other policy failures.”

James Prestwich, director of policy and external affairs at the Chartered Institute of Housing, said: “This analysis shows that the Right to Buy is an ill-designed policy which undermines the availability of social housing stock for those who need it most and adds to pressure on the public purse. An urgent re-think is needed on its future.

The Right to Buy has already ended in Scotland and Wales.

In 2017, data obtained from 111 local authorities revealed that since the Right to Buy scheme launched, 180,000 properties were sold, with 72,454 registered with an ‘away address’,  indicated subletting.

A spokesperson for The Department for Levelling Up, Housing & Communities, said: “Right to Buy gives people the opportunity to own their home and has helped almost two million council tenants into home ownership.

“Since 2010 the government has delivered over 574,100 new affordable homes, including 156,600 for social rent.

“We’re investing over £12bn in affordable housing. The largest investment in a decade which is helping hard working young people and families on to the housing ladder.”