Right-to-Buy has worsened housing crisis claims think tank

A think tank claims that Right-to-Buy has become “England’s biggest housing disaster”, costing taxpayers £200 billion.

A report by the think tank Common Wealth reveals that since 1980, nearly two million (1.94 million) council homes in England have been sold under the Right-to-Buy scheme.

The flagship policy, launched by Prime Minister Margaret Thatcher in the 1980s, was designed to give council house tenants in England and Wales the right to purchase their homes from their local authorities.

Tenants now paying higher rents

According to the report, since 1980/81, Right-to-Buy has resulted in 1.9 million council homes in England being sold to tenants at an average discount of 44% off market value.

Councils received £51 billion from these sales (£104 billion in today’s money), while these homes are now worth £430 billion.

The think tank says £194 billion of this value was “effectively given away for free through the discount,” describing the policy as “the largest giveaway in UK history.”

The report estimates that £176 billion worth of Right-to-Buy homes are now owned by private landlords, with one in six privately rented homes having originally been council properties.

On a post on X, formerly Twitter, the think-tank claims because of Right-to-Buy, “tenants are now paying higher rents to private landlords for the same homes councils once received an income for.”

Receipt of housing benefit

The report adds the financial impact on tenants claiming: “Many of these tenants will be in receipt of housing benefit. Deregulated tenancies in the PRS tend on average to incur higher fiscal awards than in the council sector (an annual difference of over £1,500 per tenancy.

“By one estimate, if all (or half) of the private tenants in former Right-to-Buy homes were entitled to housing benefit, this would mean an additional £1.5 billion per year (or over £750 million) in social security costs.”

Angela Rayner has benefited from right-to-buy

The report adds Right-to-Buy has worsened the housing crisis “through the collapse in social house building and weakening of council balance sheets, rendering them especially fragile when the onslaught of austerity began in 2010.”

According to the report, the amount of housing equity given away for free is now worth 1.6 times the remaining stock within England’s local authorities’ Housing Revenue Account, valued at around £122 billion in 2022.

Housing Secretary Angela Rayner has previously hinted at abolishing the Right-to-Buy scheme altogether, despite personally profiting from it herself.

Ms Rayner sold her former council home in Stockport for a profit of £48,500 after purchasing it at a discounted rate through Right to Buy.

The Labour government has not yet abolished Right-to-Buy but slashed the maximum discount in last October’s budget, reducing it from £136,000 to £16,000 in most London boroughs, and from £102,000 to £38,000 outside the capital.