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The Right to Buy scheme (“RTB”) has allowed millions of tenants in council housing to purchase their homes at discounted prices. Whilst it has been lauded for enabling homeownership, it has faced criticism for reducing availability of affordable rental housing. In recent years, reform discussions have gained momentum, driven by housing shortages. In light of the new Government’s budget, this article explores the key aspects of Right to Buy reform and the implications for those involved.

Recent Reforms and Proposals

Since the abolition of the scheme in Scotland and Wales, the landscape in England has evolved, with proposals aimed at addressing some of the criticisms:

  1. Reduced Discounts: From 21 November 2024, the maximum discount is being reduced to pre-2012 levels. There will also be no increase uprating in line with the Consumer Prices Index as currently seen.
  2. Extension of Right to Buy: RTB was extended to tenants of Housing Associations under a Preserved RTB. With reform incoming to increase the the duration Housing Associations can take into account acquisition, maintenance and other costs (“the Cost Floor”) when calculating discounts, it is hoped this will slightly ease the financial burden.
  3. Replacement Housing: One of the most pressing concerns is loss of social housing stock. It has been pledged that for every home sold, a replacement property will be built. Critics argue that the pace of replacement is slow so with confirmation local authorities can use all of their retained receipts from sales, rather than returning a share to HM Treasury, it is hoped financial pressures of replacing stock will be eased.
  4. Regulation and Accountability: Reforms have sought to improve accountability of the process. This includes measures to ensure local authorities are more transparent about the impact of sales on their stock and how they plan to replace homes.
  5. Community Land Trusts and Alternative Models: Alternative models are being explored that could compliment or replace RTB. Community Land Trusts (CLTs), for example, aim to create permanently affordable housing options while allowing communities to have a stake in local development.

Implications of Reform

  1. Impact on Housing Stock: Reform must balance encouraging homeownership and maintaining robust supplies of affordable housing. Effectiveness of replacement policies will be critical in determining the long-term impact on housing availability.
  2. Financial Viability for Local Authorities: Increasing discounts and extending RTB may strain the financial resources of local authorities, making it more challenging for them to invest in new housing developments and maintain existing properties.
  3. Tenant Perspectives: RTB remains an essential pathway to homeownership. However, reforms must also address needs of those who cannot afford to buy and rely on social housing for stability and security.
  4. Political Landscape: The debate is likely to remain a contentious issue. As housing remains a top priority for voters, how political parties address challenges associated with the scheme will influence their electoral prospects.
  5. Long-Term Housing Strategy: Ultimately, any reform should be part of a broader, integrated housing strategy that addresses the diverse needs of the population, including affordable housing, homelessness prevention and sustainable communities.

Conclusion

Right to Buy has played a significant role in shaping the housing landscape in England we see today. As reform discussions continue together with rumours of the government bringing an end to the scheme completely, it is essential balance is struck between promoting homeownership and ensuring needs of vulnerable populations are met with sufficient replacement homes.

Please contact our Social Housing team if you require any further information or support.