The Right to Buy scheme has been met with mixed reactions throughout its existence.
On the one hand, it’s been praised for providing families with a tangible asset when they may not have had the opportunity otherwise. It’s also claimed that owning property gives one a greater sense of personal stake and responsibility in their communities.
On the other hand, social housing advocates argue that the scheme has significantly eroded the UK’s social housing stock, contributing to the current housing crisis.
So, should Right to Buy be scrapped completely? Should it be reformed? Join us as we explore the debate in light of the current situation.
The Pros of Right to Buy
Enabling Homeownership
For many individuals, Right to Buy has been a once-in-a-lifetime opportunity to get on the property ladder and secure an asset for themselves and their families.
The psychological and social benefits associated with homeownership cannot be underestimated, often translating into better care for properties and surroundings, enhancing neighbourhood aesthetics and cohesion. And of course, it gives residents a greater sense of security and control over their living situation.
Labour’s Lisa Nandy was quoted saying it would be ‘unacceptable’ to deny social tenants the opportunity to own their own homes, citing the divide between people in Britain that own assets and those who don’t.
Economic Mobility
Homeownership provides options for individuals that were allocated to an area by their local council – an area they may not want to stay in.
Given that tenants can sell the property later without having to pay back the discounted amount, they gain more control over their future. For example, households with young children may use the opportunity to move to safer neighbourhoods.
The Cons of Right to Buy
While Right to Buy has enabled home ownership for many, the policy is a concern for many advocates of social housing.
Depletion of Social Housing
The primary issue is the depletion of the social housing stock, as homes sold through the scheme are often not replaced, leading to a shortage of affordable housing. As such, Right to Buy is often considered as an instrumental factor contributing to today’s housing crisis.
The loss of social housing units to the private sector has strained the ability of HAs to provide affordable housing options, particularly in areas with acute housing shortages.
This reduction not only limits the availability of homes for those in greatest need but also impacts the financial viability of HAs, restricting their capacity to maintain existing properties.
What’s more, around the time Right to Buy was introduced, there was a decline in the building of new social housing, with no commitment to replace sold properties at the time. In 2012, the 1:1 replacement scheme was introduced.
Currently, to meet social housing requirements in England, at least £14.6 billion in investment is needed every year until 2031. Despite this figure, there was the proposal to extend Right to Buy to HA tenants under Boris Johnson’s government in 2022.
Two pilot programmes were conducted. The first was successful and revealed strong public demand, yet the second proved the idea unfeasible due to insufficient sales receipts and a lack of available land for building replacement properties.
Right to Buy: The Main Obstacle to Delivering New Housing?
New research by UCL’s Bartlett School of Planning suggests that Right to Buy is the main obstacle preventing councils from starting to build again.
In 2017, 65% of councils were directly delivering housing, but that has since risen to 79% (as of 2023).
54% of councils are also buying back Right to Buy properties, and 40% stated that the option to keep 100% of sales receipts for two years will help them continue their direct delivery of new homes. (However, the option to keep 100% has recently ended.)
Exacerbating the Affordability Crisis
The scheme is seen as exacerbating the affordability crisis in the UK housing market, with former social housing units often becoming significantly more expensive once they enter the private market.
Since the scheme’s introduction in 1980, two million units have been sold, 40% of which are now owned by private landlords.
The high cost of private rents also makes it harder for individuals to save for a deposit, presenting another barrier to homeownership.
Should Right to Buy Be Scrapped? What Are the Alternatives?
The debate ultimately hinges on balancing individual benefits against wider societal needs. The scheme’s future could be contingent on reforming it to mitigate adverse impacts, such as adjusting discount levels to reflect regional housing market dynamics.
Also, the demand for social housing varies by region. Some argue that the scheme should be focused on areas with less acute housing shortages rather than being scrapped countrywide.
A suggestion in case the scheme were scrapped is to provide a cash bonus to long-term tenants that won’t be able to own the property.
There may be scope to increase the rate of buybacks. Many of the older Right to Buy properties sold long ago require significant work. As such, landlords may welcome the opportunity for an easy sale to the council; however, councils may need a more suitable allowance to account for the increase in property value.
Summary
The Right to Buy scheme is emblematic of the broader debate over housing policy in the UK, pitting the value of individual homeownership against the collective need for affordable housing.
While the policy has undeniably enabled many to achieve their dream of owning a home, it has also contributed to the depletion of the UK’s social housing stock.
The future of Right to Buy hinges on finding a balance that respects the aspirations of individual tenants while addressing the urgent need for affordable housing. Potential reforms could include stricter requirements for the replacement of sold homes or the introduction of regional variations to reflect local housing market conditions.
The future of Right to Buy, whether it remains, is reformed, or is scrapped, will significantly influence the landscape of UK housing for years to come.
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