Following my previous blog considering the issues with the Right to Buy (RTB) scheme, the Government has now published its response to the consultation on reforming the RTB. The full outcome can be read here.

As has been well publicised, a key part of the Government’s ‘Plan for Change’ is a commitment to increasing the supply of social and affordable housing – this has included a pledge to deliver 1.5 million new homes in England across the current Parliament.

A review of the RTB scheme was also an important component of the Labour manifesto prior to the 2024 General Election and in November 2024, the Government reduced the maximum cash discount level available to pre-2012 levels and increased the cost floor protection from 15 to 30 years, triggering a flurry of applications before the changes were implemented.

Consultation

The Government received 964 responses to the consultation, which was open for eight weeks between November 2024 and January 2025 and was made up of 25 questions. The Government has now confirmed its intention to reform the scheme; some of the main changes to be implemented are summarised below:

Eligibility

The tenancy eligibility requirement, which currently requires a tenant to be a public sector tenant for at least 3 years, will be increased to 10 years.

A minimum eligibility period of 10 years was supported by 81% of respondents to the consultation. This is the average length of tenancy of someone buying under the RTB scheme currently.

Restricting the RTB

Currently, where someone has previously purchased a property using the RTB, the amount of discount available is reduced.

The Government has confirmed that existing property owners, or those who have previously benefited from the RTB scheme, will be prevented from exercising the RTB. Although local authorities will have discretion not to apply the restriction in exceptional circumstances, such as for victims of domestic abuse. 

Percentage discounts

Under the existing rules, a tenant exercising the RTB will benefit from a discount starting at 35% of the property value for houses and 50% for flats. This then increases in line with the number of years of tenancy up to a maximum of 70% of the property value. The percentage discounts are subject to the reduced maximum cash cap as introduced in November 2024.

Following the consultation, the Government has confirmed that it now intends to set the minimum discount to 5% of the property value and a maximum discount of 15% of the property value or the cash cap (whichever is lower). Further, the same percentage discounts will be applied to both houses and flats.

Exemptions

The Government has confirmed that it will be maintaining the existing exemptions to the RTB and will not be extending these to include bungalows, flats or larger homes as had been suggested by some respondents.

However, newly built social and affordable housing will be exempt from the RTB for a period of 35 years after construction under the Government’s proposed changes. This is particularly relevant given the new £39 billion Social and Affordable Homes Programme announced by the Government, and the number of new homes to be built as a result.

Property restrictions after RTB sale

The Government intends to increase the period in which all or part of the RTB discount must be repaid upon a sale of the property from 5 to 10 years. This was supported by 72% of respondents to the consultation.

However, calls for restrictive covenants to be introduced to prevent a property purchased under the RTB from being rented privately were not accepted. Although the Government will extend a local authority’s right of first refusal when the property is sold, so that it applies indefinitely.

RTB receipts

Amendments will be made to simplify rules on the use of RTB receipts to ensure that a greater proportion will be used to deliver new social and affordable housing. Further, from 2026/27, local authorities will be permitted to combine RTB receipts with grant funding for affordable housing.

Replacement targets

The current one-for-one replacement target introduced in 2012 will be removed, although the Government has tasked local authorities to ‘go over and above replacing sold stock’ to help ensure more social and affordable housing is being delivered than lost.

Is the reform enough?

Despite some demands for the scheme to be abolished completely, the Government has set out its commitment to the RTB.

The Government hopes that the proposed changes will help support the retention of social housing stock, accelerate the delivery of new social and affordable housing and help local authorities recover the costs of building new homes before potentially losing them. The reforms would also still allow those tenants who have lived and paid rent for many years to purchase their social home.

However, the Government has resisted calls for local authorities to have greater discretion as to the eligibility rules and even being able to pause the RTB when necessary, for example, in areas of high housing demand. Further, suggested wider exemptions on the types of properties that can be purchased under the RTB will not be introduced, on the basis that it would have a disproportionate impact on the availability of the RTB to tenants.

Whilst not expressly mentioned in the consultation response, we expect the proposed reforms would apply equally to tenants of private registered providers with the preserved RTB as they would to tenants of local authorities.

The proposed changes are to be introduced ‘when Parliamentary time allows’, so how quickly these will be pushed through is awaited. Given the considerable decline in RTB sales generally, it is to be seen how much of an impact such reform will have in helping the Government’s ambitious ‘Plan for Change’. However, this is just one of the solutions the Government is seeking to implement, with the combined effect hopefully leading to the required change.