41% of Right to Buy homes are now private rentals

Reply to the comment left by Beaver at 14/05/2024 – 08:21
I just googled the answer to my own question:

https://www.gov.uk/government/publications/retained-right-to-buy-receipts-and-their-use-for-replacement-supply-guidance/retained-right-to-buy-receipts-and-their-use-for-replacement-supply-guidance

So councils can retain the money they get from right-to-buy to invest in building new housing stock on a one-for-one basis…I infer from this that the money may not be spent elsewhere e.g. on pensions and benefits for public sector workers. That seems reasonable…if the government gives local councils extra money from the taxpayer to fix e.g. potholes then you want them to use the money to fix potholes.

This is the wording in the link:

“…..receipts generated by additional sales resulting from the discount increases (against a baseline of sales forecast before the increases) would be used to fund replacement stock on a one-for-one basis nationally.”

However, whilst wording talks about ‘one-for-one’ they are not talking about like-for-like. If you sold one of the 3-bed council houses near us you’d probably be able to build two 3-bed flats and have some change left over.

I’m guessing that if the Council is allowed to sell the rental property and keep the money that means that it does not have to pay capital gains tax, corporation tax or any equivalent tax.

Reply to the comment left by Jo Westlake at 13/05/2024 – 12:40
Arguably they should if they purchased it under market rate, and having first rented it for many years at social rent allowing them to save up.

RTB was intented to boost ownership and the data shows it’s only partly achieved that. The figures for Brighton are astounding.

Reply to the comment left by Jack Craven at 13/05/2024 – 16:23
You must not be aware HAs and Councils have no choice. RTB is baked into social housing law. They wouldn’t if they didn’t have to (in most cases, some properties might be uneconomical to get up to decent homes standard or undesirable).

Reply to the comment left by davidos at 14/05/2024 – 22:36
The council houses near us are desirable. And they don’t need much more doing to them than your average non-new-build ‘principle private residence’. You apparently get the right to buy that after living in the property for 3-5 years.

It took me over 3 years of accumulating before I was able to save the 5% deposit for my principle private residence; it then also took me many more years of saving after paying tax at 40% before I had the money for my first buy-to-let. Nobody gave any of that to me.

Right To Buy is a steal!!!!

And something I didn’t understand before reading this thread is that apparently you can take that 35% discount gift from the public purse and use that to become a buy-to-let landlord.

Very few Right to Buy are being rented out by the original buyers.

Many many RtoB’s were bought as Lender repossession sales when the RtoB purchaser defaulted on their mortgages.

Reply to the comment left by Judith Llewellyn at 13/05/2024 – 10:32
Someone buys a flat but later has a growing family. Others buy in one area but later decide to move. Still others grow old and have to move, or the house is sold to pay for their care or they die

Most of those houses are not in the PRS. Overall it’s actually only about 1 house for every 100 of the population who rents a former council house

Reply to the comment left by Robert Sled at 19/05/2024 – 00:01
For those tenants who get the chance to buy their homes at 35-50% discount they have in effect won the lottery…and they may of course choose to spend their winnings on something else other than the home that they originally bought…but that lottery is funded by the tax payer.

Reply to the comment left by Beaver at 20/05/2024 – 10:28
Council housing is allocated to people in need usually families with young children. Over the years through hard work and enterprise many in council housing will become more prosperous and earn good even high incomes. Eventually children grow up and leave home. Parents are left with 2,3, or 4 bedroom houses with an income sufficient to rent or buy privately but understandably they choose to remain in council housing which is their home. Those houses are no longer occupied by people who are in need and are unavailable for other families that might need them. RTB could be seen as addressing this issue as long as receipts are reinvested in building more homes but as far as I can tell that has not happened.

We have the figures here around how many RTB are now let but if the goal was to get more home owners the figures we need are how many of the RTB people now own their own home – or how many are now renting but had a nice lump sum from the taxpayer.

I understand why you describe the RTB as a ‘nice lump sum from the tax payer’. My point is that a couple or single person occupying subsidised rented council housing with 2/3 or more bedrooms that could afford to buy or rent privately but choose not to could also be described as receiving a benefit from the taxpayer that is not available to others in the same social and economic situation.