41% of Right to Buy homes are now private rentals

41% of Right to Buy homes are now private rentals

9:49 AM, 13th May 2024, About 2 weeks ago 31

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Research reveals that 41% of properties sold under Right to Buy are now privately rented – that’s around 820,000 homes.

And since 2015, another 109,000 former council homes are now in the private rented sector (PRS), the New Economics Foundation (NEF) says.

It warns that the sales are a key factor behind the dwindling availability of social housing.

The organisation also says that since Right to Buy was introduced in 1980, the proportion of social renters has nearly halved – the English Housing Survey says it has fallen from 31% to 16% in 2022/​23.

Impact of the Right to Buy scheme

Hollie Wright, an assistant researcher at the NEF, said: “While many have benefited from it, we need to be honest about the devastating impact the Right to Buy scheme has had on our housing system.

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of Right to Buy.”

She adds: “It’s time to give local councils the powers they need to reverse the damage Right to Buy has done in their communities and give them the tools to tackle the housing crisis.”

Percentage of homes sold under Right to Buy

The NEF is also revealing which councils have a high percentage of homes sold under Right to Buy which are now in the PRS, they are:

  • Brighton: 86% of homes sold are privately rented
  • Milton Keynes: 73% of homes sold are now privately rented
  • Dover: 59% of homes sold are privately rented.

The organisation says that forcing a council to sell a home at a discount means they struggle to build new council homes.

Right to Buy is aimed at boosting homeownership

While Right to Buy is aimed at boosting homeownership, the NEF report suggests it’s failing in this aspect as well.

The research found a near-equal number of additional homes sold under Right to Buy compared to the number of ex-council properties now in private rentals between 2014 and 2023.

Conor O’Shea, Generation Rent’s policy and public affairs manager, said: “It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there.

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.”

Devolve more power to local councils

NEF is recommending that Westminster devolves more power to local councils so they can:

  • Suspend Right to Buy when it leads to affordable housing shortages
  • End Right to Buy for homes that are newly built or acquired by the council
  • Prevent Right to Buy homes from being let in the PRS
  • Reduce the discount to buy – and extend the qualifying period.

NEF also says that the Treasury should amend rules to make it easier for councils to use finance the building of replacement council homes.


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Comments

PAUL BARTLETT

8:03 AM, 13th May 2024, About 2 weeks ago

"NEF also says that the Treasury should amend rules to make it easier for councils to use finance the building of replacement council homes."

The Blair / Brown Labour administration had a long time to do that, yet failed to. So supply of social housing has not increased.

The erstwhile Tory government has drunk the Shelter kool-aid to further damage supply while doing nothing to control demand.

Will the incoming Labour government have the determination to solve these challenges or just continue down the same mistaken path?

They say that they will!

Reluctant Landlord

8:17 AM, 13th May 2024, About 2 weeks ago

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.”

Seriously? hahahahahahah!

Stella

9:53 AM, 13th May 2024, About 2 weeks ago

Reply to the comment left by Reluctant Landlord at 13/05/2024 - 08:17
I just love the way they try to rubbish the PRS.

From my personal experience of one particular London council where I have an ex - council flat I find the councils are hopeless at carrying out repairs to their buildings.

They have cost me £thousands in rectifying the problems caused by penetrating damp and all because the council failed to deal with a leaking cast iron downpipe which was reported to them several times over a period of six months.

The PRS have transformed these ex- council properties while still having them available for people for rent.

Marlena Topple

10:18 AM, 13th May 2024, About 2 weeks ago

What have Councils done with receipts from council house sales? It doesn't sound like they have used the money to build more homes.

Judith Llewellyn

10:32 AM, 13th May 2024, About 2 weeks ago

Could someone explain how a right to buy house is now being rented through prs?
Do owners sell as soon as legal to the buy to let market and if so where do they live?

Beaver

10:55 AM, 13th May 2024, About 2 weeks ago

Reply to the comment left by Judith Llewellyn at 13/05/2024 - 10:32
I think that many will have done an Angela Rayner, and either lived in them for 5 years, or claimed that they were living in them for 5 years and them sold them. The conditions for selling these homes at a massive discount to the tenant stipulated that the tenant had to live in the property as their main home for 5 years. So you can't really make any judgments about these statistics unless you know how long it was between the house being bought at a massive discount and the house being rented out.

Jo Westlake

12:40 PM, 13th May 2024, About 2 weeks ago

Reply to the comment left by Judith Llewellyn at 13/05/2024 - 10:32
That's the same as asking what any other First Time Buyer does with their starter home.
Circumstances change, finances improve, equity amasses and people move up the housing ladder.
Just because someone lived in a certain house for a while doesn't mean they should be compelled to live in it for ever.

Desmond

13:15 PM, 13th May 2024, About 2 weeks ago

Despite the western economic system feeling the need to import a million or so net immigrants per annum, our intrepid think tankers decide the cause of our housing problems must of course be... private property ownership, with an ace of spades level of villainy given to non- corporate landlords. Who would have guessed?

Beaver

14:08 PM, 13th May 2024, About 2 weeks ago

Reply to the comment left by Jo Westlake at 13/05/2024 - 12:40
That's correct: If people have lived in their "Right to Buy" home for 5 years and they choose to sell it as their main home, as Angela Rayner did, then that in itself is not breaking any law. The question is, did they rent the homes out within 5 years of purchase? If they took the enormous discount and rented the house out within the 5 years after purchase knowing that that was what they were going to do then they probably committed fraud and they might of course also be liable to CGT. Either way, they weren't entitled to the discount.

If they didn't rent the home out within 5 years of purchase you then still have the separate question of whether it's in the public interest to do it. You can't really consider that question without knowing the maintenance costs and the costs of renting. In our area the cost of renting a 3 bed semi detached council house is under £900 PCM. The cost of renting a 3 bed semi on the open market is over £2.5K PCM.

If the Council sold the council houses in our area for market value and had to pay no tax or were able to qualify for roll-over relief by re-investing the equity released from the sale of those houses into building new social housing then by selling one 3 bed semi detached house housing one family they would probably be able to house 2-3 families in flats.

Marlena Topple

14:42 PM, 13th May 2024, About 2 weeks ago

Reply to the comment left by Beaver at 13/05/2024 - 14:08
That is not correct in my case. I bought under the right to buy in 1990. I was able to sell the property on at any point however if I sold within 5 years I was liable to repay the discount. There is nothing in the lease or conditions of sale which prevented me from renting out the property from day one of ownership. Capital gains tax will be due if and when I sell the property based on the discounted price.

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