Social Housing Speed Read – Over 40% of former Right to Buy homes are now being privately rented
18th December, 2017
Recent research by Inside Housing involving Freedom of Information Act requests made to 111 local authorities suggests that over 40% of former council houses are now being privately rented. This news came as Welsh Assembly members approved a bill to abolish the Right to Buy (RTB) scheme in Wales.
What are the figures?
The 111 councils questionned have cumulatively sold 180,260 leasehold properties under the RTB since 1980. 72,454 of the 180,260 properties are now registered with an ‘away address’, indicating they are being sub-let.
This is a 7% rise in the number of former council homes being privately rented since the last research carried out in 2015. If this rate of growth continued, we could see more than half of all former RTB homes being rented out privately by 2026.
Seven councils (Milton Keynes, Bolsover, Brighton & Hove, Canterbury, Cheshire West and Chester, Stevenage, and Nuneaton & Bedworth) already have letting levels of more than 50% among former council-owned homes. In Milton Keynes over 70.9% of flats sold through the RTB scheme are now in the private rented sector, labelling it as the ‘right-to-buy-to-let’ capital of England.
What is the impact of this?
The research suggests that rent levels for RTB properties can be two to three times what a social landlord would have charged for the same property; costs which are often met by the public purse through the Housing Benefit bill. Precise figures on rents are not available however research from Inside Housing magazine revealed average council rent to be £88 per week in comparison to £210 charged by private landlords; the figures for London are naturally even higher, at £108 for Council rents, and £359 in the private sector.
The level of RTB homes now in the private rented sector has resulted in a huge decline in the number of cheaper affordable social homes available. During PMQ’s on Wednesday, Labour leader Jeremy Corbyn approached the Prime Minister on this saying “Under the Tories homeownership has fallen by 200,000; under Labour it rose by one million. And 40% of all homes sold through Right to Buy are now in the private rented sector.” He went on to say that “just one in five council homes have been replaced and hundreds of thousands of people are on housing waiting lists” challenging the Governments promise to replace one-for-one homes sold through the RTB.
Theresa May responded by saying “We are increasing the flexibilities to enable councils to actually build homes; we’ve put more money into affordable housing. He talks about Right to Buy… we want to give people the opportunity to buy their own home – the Labour Party would take that opportunity away from them.”
Seb Klier of the campaign group Generation Rent said: “The growth of the private rented sector in former council homes has come at huge cost to the state and society […] an end to right to buy will allow us to once again produce a housing stock that is genuinely affordable for most people.”
The Government has plans to extend the RTB to housing association tenants. There is a regional pilot planned in the West Midlands for next year. It appears that now is the time to consider more seriously the long-term impacts of this plan and not to make the same errors as have been done in the past.
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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