Right to Buy is broken: the case for change

Since its introduction in 1980, over two million social rent homes have been sold. Shockingly, only 2% have been replaced, and 41% of the sold homes are now owned by private landlords.

The result? A severe housing deficit that is deeply felt by the 1.3 million households on housing waiting lists and the 117,450 households living in temporary accommodation.

The losses aren’t just financial, though they are staggering: the erosion of social homes cost the UK economy an estimated £25bn last year. The real cost is felt by the thousands of families left without safe, secure and affordable homes.

Imagine a lifeboat with holes in its bottom. Housing associations and councils are tirelessly bailing water out by building what they can, while councils are forced to sell vital social homes only to rent them back at extortionate costs or rely on temporary housing solutions. The lifeboat is sinking. Without plugging the holes and building a stronger housing system, many will be left without support.

Recent government proposals, including reducing tenant discounts and requiring councils to replace homes one-for-one, are a step forward. But with rising costs for land, labour and materials, as well as changes to building standards, these measures alone won’t be enough.

One of the major issues with the Right to Buy is the severe shortage of social homes it has created. Social housing properties are sold at significant discounts, but replacements aren’t being built fast enough. For every five homes sold, only one is replaced.

“Social housing properties are sold at significant discounts, but replacements aren’t being built fast enough. For every five homes sold, only one is replaced”

This has forced many tenants into the private rental market, where average rents in England are £1,285 per month – much higher than the £457 average for social rents. As a result, more tenants need to draw on benefits to cover their housing costs, further straining public finances.

The scheme is also outdated. While it may have been a good solution in 1980 for helping low-income families achieve homeownership, housing needs have evolved dramatically since then. Today, there are numerous other government programmes that are more effective and better suited to modern housing challenges. Yet the Right to Buy has remained largely unchanged, despite its diminished relevance in the current market.

Additionally, the Right to Buy is often exploited. Instead of supporting tenants, the scheme often benefits family members, private companies and landlords who profit from discounted purchases. Some even target tenants to acquire homes cheaply for resale. 

A significant proportion of Right to Buy completions are to tenants in receipt of benefits. There are widespread issues of homes sold under the Right to Buy not being maintained to the same standard as the socially rented homes around them.

Although councils have the option to buy back homes sold under the scheme within 10 years, high property prices and maintenance costs often make this impractical, leaving the housing stock depleted and communities underserved.

In Leeds, there have been 5,112 eligible sales through the Right to Buy since 2012-13, but only 913 starts or acquisitions funded through Right to Buy receipts over the same period. That’s a net loss of almost 4,200 social rent homes.

The Right to Buy scheme urgently needs reform, and several key changes could make it more effective and equal. The main goal is to stop the loss of social housing to the private sector and to increase the number of new homes being built.

The changes we’re proposing aren’t about stopping social housing tenants from buying a home, but about helping them to achieve their housing aspirations in a way that also protects social housing for the long term.

First, discounts should be fixed at a monetary sum rather than a percentage of the property’s value. An initial discount of £8,000, increasing by £2,000 annually to a maximum of £24,000 after 11 years, would create a fairer system. This would eliminate the disparities caused by variations in property values based on location or age.

“The changes we’re proposing aren’t about stopping social housing tenants from buying a home, but about helping them to achieve their housing aspirations in a way that also protects social housing for the long term”

Second, and most importantly, discounts should be limited to buying homes on the open market or through homeownership schemes, rather than tenants’ current rented homes. This approach protects social housing stock for those who need it the most and avoids any confusion about what is included or excluded from the scheme. It provides a clear and straightforward approach, making it the most effective way to maximise the impact of new-build programmes and boosting the overall supply of social housing.

Additionally, the scheme should be centrally funded by the government to alleviate financial pressures on local councils. This approach would also provide more consistent oversight, ensuring resources are used more efficiently and housing availability is maintained.

Finally, stronger measures are needed to prevent fraud and exploitation. Solicitors should be required to verify that buyers and sellers are not improperly connected. These checks would help stop private companies and individuals from profiting unfairly from public funds intended to support low-income families.

Reforming the Right to Buy offers clear advantages. It would help the government to deliver the “biggest boost to social and affordable housing in a generation”, create a simpler system for managing housing schemes, reduce fraud and limit public funds from being syphoned off to private profits. Tenants would benefit from clearer information, protection from third-party exploitation and more housing choices.

Local authorities would be able to move more households out of temporary accommodation, reduce the blight from poorly managed private properties and have greater financial stability. The latest provisional government figures show local authorities are spending a record £2.29bn on emergency accommodation for people – money that could be spent building new social rent homes.

The housing crisis is worsening, and social housing is more essential than ever. To meet the government’s goal of delivering the “biggest boost to social and affordable housing in a generation”, we must overhaul the Right to Buy.

Only by protecting and growing the number of social rent homes can we ensure everyone has access to the safe, secure and affordable homes they need. If ever there was a time for change, this is now.

Nick Atkin, chief executive, Yorkshire Housing