One of the topics we have discussed regularly on this blog is the right of social tenants to buy their homes—and the long-term problems this has caused.
The most recent post being our June 2024 post on why the housing crisis cannot be solved without reforming Right to Buy.
The Problem
Councils/Local Authorities have had the ability to sell council houses to their tenants since 1936. However, this was rare until Mrs Thatcher’s government passed the Housing Act 1980. This act gave council tenants the right to buy at a substantial discount. Subject to certain conditions, including a qualifying period of residence.
This proved to be a very popular policy, and since that time, millions of council tenants have purchased their council homes. However, in the long term, it has been very bad for the country and our housing.
The main problem is that councils were not able to use the proceeds of sale to build new homes. Which meant that the number of properties in council ownership reduced over time.
This resulted in big problems for Councils who are under a legal obligation to rehouse homeless people who fall within the priority need category.
These problems have now become acute. The population has increased and our housing stock has not increased to keep pace. Councils are being faced with more and more homeless families, who they are under a legal obligation to rehouse, but with no houses to put them in.
The only option is hotels, which are expensive, and this is causing major financial problems. Some councils indeed are on the brink of issuing section 114 notices. The Local Authority equivalent of going bankrupt.
This is the problem faced by the Labour government when it came into power in July 2024.
The situation as at July 2024.
The preceding conservative government had increased the right to buy discount to 60% of the house value, or 70% for flats. The minimum qualifying period was reduced to 3 years.
However, many people were unhappy about the right to buy policy and the problems it has brought. There were calls to abolish the right to buy altogether in England, as had been done in Scotland and Wales.
The Labour government’s election manifesto had included clear commitments to reform the right to buy, although not to abolish it. It promised to
- Review the right to buy discounts
- Protect newly built social housing, and
- Tighten the qualifying criteria and enforcement. For example, of repayment clauses if the property is resold within a specified period.
Their overall strategy being to preserve the principle of the right to buy for long-term tenants but reduce its impact on social housing availability.
Bearing in mind that another manifesto commitment was to build new houses, and in particular, new Council housing. There is not much point in building new council houses if they are to be sold off at a discount after 3 years.
Particularly if they end up in the hands of private landlords.
The consultation and the government response
Before taking any action, a consultation took place between 20 November 2024 and 15 January 2025. It sought views on how the Right to Buy should be reformed.
A government response has now been published, which sets out a proposed package of reforms. These are as follows. To:
- increase the eligibility requirement to 10 years, to support councils in rebuilding their stock
- prevent people who already own a property or who have previously benefited from the scheme from buying under the right to buy scheme, save in exceptional circumstances (eg victims of domestic abuse).
- reduce the discounts so they will start at 5% of the property value and increase by 1% for every extra year up to a maximum of 15% of the property value or the cash cap, whichever is the lower.
- exempt newly built social and affordable housing from the right to buy for 35 years. This would not affect existing tenants but would support Councils looking to build new homes.
- increase the period that the council has the right to ask for repayment of the discount from 5 to 10 years. They will also extend the period o time when a Local Authority has the right of first refusal so it applies ‘in perpetuity’.
They also propose to amend the rules about the use of right-to-buy receipts to help councils fund building costs. They will also allow councils to do more than just replace housing stock sold. With a view to increasing social housing overall.
All this is to be set out in legislation ‘when Parliamentary time allows’.
Other challenges
This is all good news and hopefully councils will be able to start building and replacing the 4 million or so homes which have been lost to social housing since the 1980’s.
However, just replacing housing is not enough. It needs to be good housing built to proper standards.
Poor standards
There have been many complaints about the poor standards of new housing. For example, architect and TV presenter George Clarke has said that one of the biggest problems is the quality of construction. Saying that
If new-build developments were of a higher quality, fewer people would be against them. Many new homes are being built at speed with minimal attention to design or durability, particularly on the outskirts of towns and villages.
He also suggested that people would be better off building their own houses.
The Guardian commented in October 2023 that new housing is generally so poor that it has spawned an entire industry of “professional snaggers”. People called in by unhappy housebuyers to inspect their homes.
Meanwhile, the big housebuilding firms are making massive profits from this substandard housing.
Poorly constructed new housing is not going to help things.
Climate change issues
There are also the changing needs of our housing due to changes in the climate. Most British houses are built to conserve heat in the winter. However, this is not going to help us with the hotter summers we are increasingly experiencing today.
Some newly built houses and flats are becoming almost unlivable, if air conditioning is not provided.
Heat pumps, which are being promoted to reduce energy costs, can be used to cool buildings as well as heat them. However, this type of heat pump is not currently covered by government subsidies (although it looks as if it is being considered).
The government needs to take a long, hard look at what standards are required for future housing stock and ensure that new standards are properly enforced.
The post Why Right to Buy Needs Reform: Labour’s Plan to Fix a Broken Housing Policy appeared first on The Landlord Law Blog.