Right To Buy Scheme: Impact on Social Housing and Proposed Reforms

In the late 1960s, during Harold Wilson’s tenure as Labour prime minister, approximately one-third of England’s population resided in council-owned homes. By July of this year, when Keir Starmer assumed the role of prime minister, the proportion of individuals living in social housing across England had decreased to about 16% of the population, representing approximately four million people. Since its introduction in the early 1980s by Margaret Thatcher’s Conservative government, the Right To Buy (RTB) scheme has facilitated the sale of around two million council-built properties to their tenants at significantly reduced prices. Michael Heseltine famously characterized the launch of RTB as “laying the foundations of one of the most important social revolutions of the century.” However, a key question has emerged: did the sale of council houses at prices lower than the cost of new construction inadvertently create the groundwork for a housing crisis? Historically, the funds generated from these sales have proven insufficient for the construction of new social housing units, despite an urgent need, evidenced by approximately 1.3 million people currently on waiting lists in England. For instance, government data indicates that in the north-west of England, about 4,350 council houses were sold over the past decade, yet the proceeds from these sales contributed to the building or acquisition of just over 1,400 replacement properties. While the £336,612,000 raised from these sales might appear substantial, it averages out to roughly £77,000 per property. Furthermore, councils have generally not been permitted to retain the full amount, instead being required to return a significant portion to the central government. Currently, around 200,000 individuals in the region are awaiting social housing. Despite efforts by housing associations to construct new homes and the existence of schemes funded by other government resources, the persistent concern remains that the revenue from selling off existing homes is far from adequate to rebuild or acquire equivalent replacements. Angela Rayner, the Labour deputy prime minister and minister for housing, who notably purchased her own council house in Stockport through the RTB scheme, appears to have acknowledged the criticisms surrounding the policy. Rayner recently stated her intention to potentially introduce restrictions that would prevent tenants of newly built council houses from purchasing them in the future. This proposed decision is anticipated to be well-received by Labour politicians in regions where the demand for social housing is arguably as high as ever, yet its availability remains very limited. The Labour metro-mayors for both the Liverpool and Manchester regions have publicly expressed their desire for an increase in social housing construction within their areas. In May, Andy Burnham, the leader of Greater Manchester, urged the then-Conservative government to suspend RTB on new builds, following the loss of 500 social homes to the scheme in 2022. He contended that allowing tenants to purchase planned homes would be “like trying to fill a bath without the plug in.” On Merseyside, nearly all former council housing stock was transferred to housing associations over the last two decades. However, metro mayor Steve Rotheram asserts that registered