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Here’s what Right To Buy has done to the property market since 1980

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Right To Buy was introduced over 40 years ago – but what is it? (Picture: Getty Images)

The UK housing market is notoriously challenging. From frankly ludicrous property listings to sky-high rent; there’s so much to navigate.

But there’s a side to the property industry that, stemming from a policy that was introduced over 40 years, has changed the landscape of what it means to own a home – and how many of us are able to get on the property ladder in the first place.

Ever heard of Right To Buy? A controversial policy that has allowed tenants to buy their rented properties from the council, it was introduced as a means of encouraging home ownership.

Now, according to new research from the New Economics Foundation (NEF), more than four in 10 council homes sold under Right To Buy are owned by private landlords, with 41% of all council homes sold under the scheme now let on the private market – which, arguably, the policy’s original architects likely didn’t foresee.

What is Right To Buy?

So, what is Right To Buy and what impact has it had on the property market?

As Louise Drew, head of building communities at Shakespeare Martineau, explains: ‘Right to Buy is a scheme in the UK that allows those living in council houses or some housing association properties to buy their homes at a heavily discounted rate.

‘However, there are some restrictions in place, for example a tenant must have lived in the property for over five years and the house cannot immediately be places on the open market, after sale.’

According to statistics from London Councils, around 300,000 council homes have been sold off through Right To Buy since the policy was first introduced in 1980 under Conservative Prime Minister Margaret Thatcher.

In 2023, meanwhile, London boroughs had 301,000 households on their waiting lists.

What does Right To Buy mean for council home availability?

Though it allows council tenants to purchase their homes at discounted rates, critics have argued that the policy has taken away from the pool of available homes on the market, transforming council-owned properties into private-owned homes.

What’s more, the construction of new council houses to replace those sold off through Right To Buy, as well as maintain the ongoing demand for housing, has stagnated in recent years. So, when council houses are being sold off, they’re not always being replaced.

Statistics from homelessness charity Shelter show that, in the 1960s, 1.24 million social homes were constructed compared to 150,000 during the 2010s. And in 1969 alone, the UK built more social rent homes than in the last 12 years in total.

What’s more, while in 2023 11,400 new social rent homes were built, the UK also sold 19,000 homes through Right To Buy, as well as at least 3,000 through demolition and 1,000 through conversions (a process which Shelter explains involves homes previously let at social rent prices, AKA, council properties, are switched to affordable rent).

There’s a council housing crisis in the UK – and not enough are being built (Picture: Getty Images)

However, London is ahead of the rest of the country when it comes to replacing and rebuilding new council properties.

Mayor of London Sadiq Khan has affirmed his commitment to building new council homes. Since his election in May 2016, figures presented by the Mayor’s office suggest that on average, 89 new council homes per week have started construction.

In 2023, local authorities in the capital began building ‘twice as many council homes than the rest of the country combined,’ as almost 11,000 new properties were started between 2022 and 2023.

What are the negatives of Right To Buy?

From contributing towards plummeting levels of social housing stock across the country to abuse of the system, Right To Buy isn’t without its negatives.

As Louise explains, Right To Buy isn’t the ‘perfect route to home ownership’ it might appear to be on paper.

‘There are numerous pressures facing the housing market in the UK, not just Right to Buy, although it hasn’t made things better. It has certainly contributed to plummeting levels of social housing stock across the country,’ Louise adds.

‘A recent report by Marrons has shown that Greater London’s social housing stock is due to drop by a further 95,000 homes by 2040, a huge number of which will have been sold off under Right to Buy. Add in rapidly growing council housing waiting lists and you have a perfect housing storm.’

She adds: ‘Sadly, the system is open to quite widespread abuse. There are numerous instances where vulnerable people have been approached and offered money to allow them to purchase their home, only to be forced to pass it over to predatory third parties, after the five-year period has elapsed.

‘There are also cases where children have convinced parents to buy their council houses and then pass them over to them to avoid inheritance tax, after which the parents have found themselves exposed to the risk of homelessness.’

What are the positives of Right To Buy?

At the other end of the spectrum, Right To Buy does go some way towards helping people onto the property ladder – which, in the current market, is incredibly difficult.

‘Right to Buy offers a route to home ownership that wouldn’t be possible for many people, so that has to be a positive,’ Louise explains.

‘However, the speed at which sold council houses are replaced is far too slow, and too many houses sold under Right to Buy end up back on the private rental market, undermining the core aim of the scheme.

‘Frequently they don’t do any refurb when they go back on the market – low quality housing stock.’

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