Government Announces Major Right to Buy Reforms to Protect Social Housing Stock

The government has launched an extensive consultation on reforms to the Right to Buy scheme, with proposals that could see newly built social homes exempted from the policy. The eight-week consultation, which began on 20 November, aims to address the ongoing decline in council housing stock and ensure the long-term sustainability of social housing in the UK.

Communities Secretary Angela Rayner emphasised the critical importance of protecting social housing, stating that the current system cannot be maintained while "councils are losing homes quicker than they can replace them." The consultation comes in response to concerning statistics showing that between April 2012 and March 2024, over 124,000 Right to Buy sales occurred, yet fewer than 48,000 homes were replaced.

The proposed reforms include several significant changes to the existing Right to Buy framework. Among the most notable is the potential exemption of newly built social housing from Right to Buy, either permanently or for a defined period ranging from ten to thirty years. This proposal aligns with recommendations from a September report endorsed by 100 council landlords.

Southwark Council Leader Kieron Williams highlighted the financial implications of the current system, noting that the uncertainty around future rental income makes it challenging to finance new building projects. "It's really fundamentally important that Right to Buy should not apply to new build homes," Williams stated.

The consultation also proposes extending the eligibility period for Right to Buy from the current three-year requirement as a public sector tenant to potentially five, ten, or more years. Additionally, the government is considering increasing the period during which councils can reclaim Right to Buy discounts if properties are sold on, from five to ten years, aimed at deterring quick resales and private letting of former council properties.

Following recent announcements in the Budget, the consultation seeks views on revising percentage discounts to align with new reduced maximum cash discounts. The government is considering minimum percentages between 0% and 5%, and maximum percentages between 5% and 20% - a significant reduction from current levels of 35% to 70% for houses and 50% to 70% for flats.

The Local Government Association has welcomed these proposals, with housing spokesperson Adam Hug describing them as "positive steps" that will support the replacement of sold homes and help stem the loss of existing stock. Gavin Smart, chief executive of the Chartered Institute of Housing, also expressed support for the reforms, noting concerns about the loss of 220,000 homes available at social rents over the past decade.

Ms Rayner emphasised the urgency of these reforms, comparing the current situation to "trying to fill a bath when the plug's not in." She stated that the proposed changes would help councils protect and increase their housing stock while maintaining opportunities for homeownership for those who might otherwise struggle to get on the property ladder.

The consultation also includes proposals to simplify rules around the use of Right to Buy receipts, including removing the current five-year spending time limit and allowing pooling with grant funding. These changes aim to give local authorities greater flexibility in replacing sold properties and maintaining their housing stock.

Industry experts suggest these reforms could mark a significant shift in social housing policy, potentially helping to address the UK's housing crisis while preserving the principle of homeownership opportunities for social housing tenants.