Right to Buy

This is spectacularly dysfunctional.

It’s not just historic flats from Britain’s postwar housebuilding boom that are being sold. Brand new council houses are also going under the hammer, almost as fast as they are being built. Design blog Dezeen revealed this month that seven of Norwich’s newest council homes are already in the process of being sold off, fewer than five years after they were completed. Other authorities have also been forced to sell their new council homes, such as Hackney in east London, which has already lost some of the social housing it built in Stoke Newington in 2018.

Despite right to buy being so destructive to public finances that it has been abolished in Scotland and Wales, Labour has announced it will keep Thatcher’s policy if it wins the next general election. This U-turn, backtracking on the party’s previous two manifestos, which promised to suspend sell-offs, has bitterly disappointed many local politicians who are desperate for change.

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It’s hardly surprising most councils are not building many homes at all, given they are obliged to sell them at a discount almost as soon as the paint is dry. Would you spend hundreds of thousands of pounds building a new house to rent out if your tenants could force you to flog it to them for less than it cost to construct, just three years later? According to research from UCL, right to buy “remains the major disincentive to local authorities building more social rent homes” as the majority of councils rightly fear the policy will impact any new housing developments they undertake.

Instead, many authorities have launched schemes to cling on to as much of their remaining stock as possible. Some offer grants to incentivise council tenants to buy on the open market instead of via right to buy. Wandsworth, in south-west London, for instance, will chip in up to £120,000 towards helping their tenants purchase a home “within the UK or anywhere else in the world”, provided it is not a council property.

As set out in JRF's recent report Making a house a home, the shifting balance of tenure has played a key role in myriad housing problems, from unaffordability and poor conditions to insecurity, and a plan for building a more equitable housing market must reckon with who owns our housing stock (Baxter et al, 2022).

This should take the form of efforts to shift tenure over time, and doing that directly through socialisation could play an important role. However, there are criticisms of this approach, and there needs to be a consideration of how acquisition may be best used within the housing system.

This briefing explores these criticisms, how they may be best overcome, and proposes the best way of deploying socialisation, arguing for a focus on:

• reducing the cost of providing temporary accommodation (TA), while supporting efforts to drive up standards in the sector
• growing a community rented sector in lower-cost housing markets that are otherwise plagued by poor conditions, poor management, and where rental payments are not benefiting local communities
• a wider plan to reform the Right to Buy scheme to arrest the decline of social housing and to keep subsidies in the system.