The Scandal of Right-To-Buy/Buy-To-Let

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Ministers are facing calls to shelve Margaret Thatcher’s right-to-buy scheme after a devastating analysis revealed that more than 40% of council houses sold under its terms in London are now privately rented.

According to a report in the Guardian, the damning findings of an analysis of Freedom of Information data also show that:

  • Tens of millions of pounds are being paid by local authorities to rent former council homes in order to house growing numbers of homeless families;
  • Some councils have bought back their former homes at more than six times the amount they sold them for;
  • Hundreds of private landlords now own five or more right-to-buy properties. There are several London boroughs where more than half the houses sold through the policy are now in the hands of private landlords. Private renters have to pay more than people living in council-owned properties.

Right-to-buy, which offers discounts to council tenants who buy their home, has been in place since 1980 and was boosted in 2012 under the Conservative-Liberal Democrat coalition government. The latest analysis found that 42% of homes sold under the scheme in London are now rented out by private landlords, up from 36% in 2014. According to the Resolution Foundation thinktank, local authorities and housing associations in England have built one home for every two sold under the right-to-buy scheme.

Around 466 individuals or companies have the leasehold for at least five former council homes each, while there are 2,333 right-to-buy properties where the local authority pays private landlords to house homeless families across London. Councils have spent £22m a year on renting back properties they once owned to use as temporary accommodation.

Jon Sparkes, chief executive of homelessness charity Crisis, said: “Social housing is more affordable and more secure than private renting, and provides much-needed stability for those at risk of homelessness. It is unacceptable to see what little social housing options are available are being removed. What we need to see from the government going forward is suspension of the right-to-buy while it invests to build the 90,000 social homes needed in England each year to keep up with demand.”

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “It’s likely to be too late for a ban on right-to-buy having a significant impact on London, as the remaining social housing stock is largely concentrated among low-income households. But what these figures do show is the acute need to build more homes in the capital across a range of tenures, including social housing.”

For an example of how the right-to-buy/buy-to-let practice can be abused, see our next story.