Ahead of the 2024 General Election, the Labour manifesto included a pledge to review the Right to Buy (RTB) discounts introduced in 2012 to protect existing social housing stock.

Government review findings

The Government review was published in October 2024. The review confirmed that 1.27 million people are on the social housing waiting list, together with 117,450 households in temporary accommodation. Council housing stock has decreased from 5.1 million in the early 1980s to 1.6 million. The Government has pledged to deliver 1.5 million new homes in England across the current Parliament. 

The review also analysed the one-for-one replacement target -  between April 2012 and March 2024, there were over 124,000 RTB sales but fewer than 48,000 homes had been replaced in the same period.

In addition, the one-for-one replacement target did not require a like-for-like replacement; replacement stock could be let on a different basis, any size and in a different location. For example, 98% of council housing stock is let at social rent meaning that the vast majority of RTB sales are social rent properties; however, over the last three years, only around a third of the replacements were let at social rent.

The wider impact of Right to Buy

Other figures published in recent reports conducted by Yorkshire Housing and the independent think-tank Resolution Foundation highlight the issues with the RTB and the overall social housing crisis:

• 2.02 million homes have been sold through RTB since 1980, however, only 2% of those sold have been replaced in this time;

• RTB sales account for 90% of all social home sales since 1980 (when the RTB was first introduced);
• 41% of homes from RTB sales are now in the hands of private landlords; and
• 400,000 new homes and £50 billion in funding will be needed over the next 4.5 years to return levels of affordable housing stock to the levels in 2010.

As a result of the review, the Government has decided to reduce the maximum cash discount level available to pre-2012 levels. It is estimated that this will reduce RTB sales by approximately 25,000 over five years, resulting in these homes remaining in the social rented sector. The reduced levels came into effect from 21 November 2024.

The Government also increased the cost floor protection from 15 to 30 years from 21 November 2024. The cost floor limits the discount available on RTB properties to ensure the purchase price does not fall below the amount spent on building, buying, repairing or maintaining the property over a certain time period.

However, the Local Government Association (LGA) recently revealed that some councils received more RTB applications between 30 October 2024 and 20 November 2024 than they would have in a typical year in response to the reduced discount levels being introduced. This has meant an increased strain on local authorities’ resourcing whilst trying to meet the statutory response times to RTB applications. Many of our clients who originally formed from large-scale stock transfers from local authorities also saw a huge spike in preserved RTB applications.

Further reform on the horizon?

Following the review, the Government launched a consultation to seek views on wider reform of the RTB. This consultation ended on 15 January 2025.

The National Housing Federation (NHF) has welcomed the decision to reform the RTB and believes the discount levels should be a minimum of 0% with a maximum of 5% for both houses and flats. The NHF also believes the tenancy eligibility requirement should be increased to at least ten years. The Chartered Institute of Housing (CIH) and the LGA have also asked for an increase in the qualifying tenancy period.

The CIH has also called for permanent exemptions for new build properties together with giving local authorities more power to adapt RTB policy to local needs. The LGA also expressed a desire for local authorities to be given the power to shape the RTB scheme to fit the needs of their communities.

In response to the consultation, there have been some calls for the RTB to be abolished completely, as has been done in Scotland (2016) and Wales (2019). This view was expressed by the Housing Forum and the Social Housing Action Campaign, which provide views from residents.

However, questions can also be raised as to the impact of any changes to the RTB and how effective these will be on the housing crisis. Sales under the RTB have slowed significantly, given the smaller social rental stock and the fact that a large proportion of tenants eligible for the RTB are simply unable to afford to purchase their homes.

The Government will set out its next steps following the consultation in due course, but it does appear that further change is required to satisfy the wider concerns of the social housing sector.

For more information

For support with applications or queries on the RTB or preserved RTB, please contact me.