Local authorities call for reform of Right to Buy scheme

Pace has been gathering for reform of the Right to Buy scheme with local authorities and Government calling for changes to the scheme including a change to the amounts of receipts and the use of them. Angela Rayner, Deputy Prime Minister and Secretary of State for Levelling Up, Housing and Communities is considering abolishing the Right to Buy scheme for newly built council houses and cutting the discount offered to existing tenants as part of a ‘council housing revolution’.

Here, Andrius Roos — an experienced property lawyer in our housing and communities team — outlines the key recommendations presented in a report on the future of council housing ahead of the autumn Budget.

Securing the future of council housing

It’s understood that Ms Rayner attended an urgent meeting prior to the release of the Securing the Future of Council Housing report which followed an earlier interim report’s reference to “our country’s broken council housing finances” and to future council housing being “in danger”.

Commissioned by 20 local authorities and signed by over 100 council landlords, the report explores the current state of British housing stock and makes five recommendations to secure council housing.

These include reducing the available discount (something enacted by Tony Blair’s government) to allow local authorities to keep 100% of Right to Buy receipts for reinvestment in social housing and removing the time limit for spending receipts. The report also proposes amending tenants’ eligibility from three to fifteen years as well as allowing the cost floor to be increased in line with inflation and not be time limited. The local authorities also called for the right to not apply to new build houses or those which have been retrofitted or otherwise improved, as well as flexibility to shape the scheme according to local requirements. 

Will the Right to Acquire be affected?

Introduced by Margaret Thatcher’s government in the 1980s, the Right to Buy scheme was extended to tenants of housing associations in 2015 and followed by the introduction of the Right to Acquire. 

While it’s worth noting that there has been no mention of the Right to Acquire in the report, given that the discounts available are substantially lower than for Right to Buy it’s unlikely that this will be affected.

Will the recommendations be enacted?

It’s unknown at this time whether the above recommendations will be enacted in full, or the scheme will be abolished in its entirety. The report is only signed by local authorities and doesn’t cover the Preserved Right to Buy offered by housing associations — however, we know that many of our housing association clients share these views and would equally welcome such changes. 

Right to Buy schemes have already been abolished in Scotland (2016), Wales (2019) and Northern Ireland (2022) and it’s thought that the new Labour Government will want to follow suit or certainly radically reform it, given the origins of the scheme.

It’s thought that a consultation on proposals will be launched in the autumn Budget, which is expected later this month.

It’s clear that homes sold through Right to Buy are not being replaced with the same number of new homes. It’s been reported that in the last financial year 10,896 homes were sold through Right to Buy but only 3,447 had been replaced. With the Government’s promise to increase the number of social and affordable rented housing, we expect the Government to seek to reduce the number of social housing homes being lost in this way. We will of course monitor the progress of any proposed reforms and how they may impact the sector.

Talk to us

If you need advice on how to prepare for the ‘council housing revolution’, get in touch with our experienced property lawyers.

With one of the UK’s largest dedicated housing law teams, we handle the full range of matters for regional and national affordable housing providers, housebuilders and leasehold management companies.

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