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 a month 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

Beaver

14:49 PM, 13th May 2024, About a month ago

Reply to the comment left by Marlena Topple at 13/05/2024 - 14:42
Thanks Marlena that's interesting. So you were entitled to buy the home and rent it out on day one? ...but if you had sold within 5 years then you would have been liable to repay the discount?

So basically you got a discount to become a buy-to-let landlord but you only got to get to keep that discount if you kept the property for five years.

What was the % discount that you were entitled to?

Marlena Topple

15:11 PM, 13th May 2024, About a month ago

Theoretically yes. With the lease I have there was no barrier to renting at any point. The discounts for RTB vary depending on length of prior council tenancy. You can find this information via a Google search.

Jack Craven

16:23 PM, 13th May 2024, About a month ago

Why do people moan about councils not building more social houses when the sell one of theirs ? They never intended building any, otherwise why did they sell in the first place, It was because Maggi wanted everyone to be a homeowner with no rentals for anyone.

havens havens

16:35 PM, 13th May 2024, About a month ago

i think to fix the problems caused by the Right to Buy scheme, we should give local councils more control. They can stop Right to Buy in places where there aren't enough homes. We should also stop selling new or council-acquired homes and keep them for people who need them. Making it harder to get discounts and buy homes quickly can help too. And councils need better ways to get money to build more homes for people who need them.

Marlena Topple

16:42 PM, 13th May 2024, About a month ago

Many long term council tennants have become increasingly affluent over the course of their tenancy and could either afford to buy or rent privately but choose not to. I don't blame them but this factor contributes to a shortage of social housing for those in need. I do not wish to defend RTB but it does in part address this issue as long as the receipts from sales are invested in building more social housing.

Beaver

16:59 PM, 13th May 2024, About a month ago

Reply to the comment left by Marlena Topple at 13/05/2024 - 15:11
So on a house that's a 35% discount if you've been a tenant for 3-5 years. More than a third of the value of the home:

https://www.gov.uk/right-to-buy-buying-your-council-home/discounts

It's a 50% discount for the same period on a flat.

The discount goes up every year by 2% up to a maximum of 70% or £102,400 across England and £136,400 in London.

And having been given up to £136,400 net of tax then you can become a buy-to-let landlord with your property.

Cider Drinker

17:36 PM, 13th May 2024, About a month ago

Landlords tend to own the cheaper and older properties. Former council properties tend to be the cheaper and older properties.

Stella

18:29 PM, 13th May 2024, About a month ago

Reply to the comment left by Beaver at 13/05/2024 - 16:59
Considering the subsidized council rents as well as the substantial reduction if they buy the property it is a big win for the council tenants.
The councils do not have the same expenses as the PRS for example they do not pay tax or have to worry too much about complience etc. they can therefore afford these subsidized rents.

Andrew Lipscombe

18:38 PM, 13th May 2024, About a month ago

A covenant to the sale should have been that should you wish to sell, first refusal goes to the local council or a RP/HA @ sale price (not MV) pls HPI since the sale. The loss of an affordable / social unit to the private market is just stupid. The transfer of equity for no apparent reason to the person living in it is a dystopian lottery that makes little sense.

Arguing to the contrary explains a lot about the issues in the country. With what has happened to this housing stock just not making sense.

Beaver

8:21 AM, 14th May 2024, About a month ago

Reply to the comment left by Stella at 13/05/2024 - 18:29
It’s certainly an enormous giveaway. The council houses near me are perfectly decent houses. The tenants rent them for out much more than £800 PCM when an equivalent house locally is more than £2.5K PCM. Then after they’ve been there for a short period of time they have a ‘right’ to buy a house that they were paying what was in effect a subsidised rent for anyway.

As for where the money goes…does it ever go to building more accommodation? If so, when?

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