More than 4 in 10 council homes sold under right to buy now owned by private landlords

41% of all council homes sold under the right to buy scheme are now being let on the private market, according to research by the New Economics Foundation (NEF) as a member of the Homes for Us alliance, published today. NEF Freedom of Information requests found that the number of homes bought under right to buy and now in the private sector has risen by 3.2 percentage points since 2014/​15, meaning around 109,000 more former council homes are now being let privately.

The report argues that the right to buy scheme has been a major contributing factor to the UK’s housing crisis. Since the scheme’s introduction in 1980 the proportion of social renters has almost halved, from 31% of English households to 16% in 2022/​23, according to the English Housing Survey. Tenants who would have previously been housed in social homes are now forced to rely on expensive, insecure and often poor-quality homes being let by private landlords.

As well as depleting the availability of genuinely affordable homes, the report highlights how the right to buy scheme is increasingly failing to achieve its stated goal of increasing owner occupation. The research found between 2014/​15 and 2022/​23, there was a broadly similar number of additional homes sold under right to buy (119,000) as there were additional former council homes now being let privately (109,000).

Hollie Wright, assistant researcher at the New Economics Foundation, said:

“While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system. 

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of right to buy. 

“It’s time to give local councils the powers they need to reverse the damage right to buy has done in their communities and give them the tools to tackle the housing crisis.”

Conor O’Shea, policy and public affairs manager at Generation Rent, said:

“It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there. 

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing. 

“In order to address the crisis in renting, we must keep homes in the social sector, and give councils the ability to build many more, to properly cater for the needs of the people who desperately need affordable and safe homes that are not being provided by private landlords.”

The research also reveals local authorities with a particularly high percentage of homes sold under right to buy which are now being privately let:

• In Brighton 86% of homes sold are being privately rented
• In Milton Keynes 73% of homes sold are now being privately rented
• In Dover 59% of homes sold are being now being privately rented

By forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. To help get councils building again, NEF recommends devolving powers over right to buy from Westminster to local councils, including giving them the ability to:

• Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages
• End right to buy for newly built or acquired homes
• Prevent sold right to buy homes from being let in the private rented sector (PRS)
• Reduce discounts and extend qualifying periods

In addition to these reforms, the report suggests Treasury rules should be amended to make it easier for councils to use funds from sold homes to build replacement council homes.

Contact

James Rush /​james.rush@neweconomics.org

Notes

The New Economics Foundation is a charitable think tank who are wholly independent of political parties and committed to being transparent about how it is funded.

Homes For Us is a coalition of grassroots organisations, charities and tenants unions who have come together to fight for more and better social housing, set up by NEF.

The research, Reforming right to buy, can be found at: https://​newe​co​nom​ics​.org/​2​0​2​4​/​0​5​/​r​e​f​o​r​m​i​n​g​-​r​i​g​h​t​-​t​o-buy

NEF’s Freedom of Information Act requests asked local authorities for the number of homes sold under right to buy since 1980 and the number of sold homes where the council retains the freehold and the leaseholder has requested permission to sub-let the lease. Our figures are therefore an underestimate of the phenomenon, as they do not account for sold freehold homes now being let, nor do they account for leasehold right to buy homes where the leaseholder is letting the property without the permission of the freeholder.

Similar Freedom of Information requests were compiled by Inside Housing in 2015 in which it was found that 37.6% of sold homes were being let privately. https://​www​.insid​e​hous​ing​.co​.uk/​i​n​s​i​g​h​t​/​r​i​g​h​t​-​t​o​-​b​u​y​-​t​o​-​l​e​t​-​44479

That request was re-issued by Inside Housing in 2017, by which point 40.2% of homes were now being let https://​www​.insid​e​hous​ing​.co​.uk/​n​e​w​s​/​e​x​c​l​u​s​i​v​e​-​7​-​r​i​s​e​-​i​n​-​f​o​r​m​e​r​-​r​i​g​h​t​-​t​o​-​b​u​y​-​h​o​m​e​s​-​n​o​w​-​r​e​n​t​e​d​-​p​r​i​v​a​t​e​l​y​-​53507