Right to Buy purchases have cost taxpayers almost £200bn in discounted sales over the last five decades and contributed to the country’s housing crisis, according to a new report.
Right to Buy was one of former Prime Minister Margaret Thatcher’s “most iconic and consequential policies”, says the thinktank Common Wealth, which since 1980/81, has seen 1.9 million council homes in England sold to tenants at an average discount of 44% of market value, earning cash receipts of over £51bn.
The policy was key to the Conservative Party’s claims that the UK was becoming a “property-owning democracy”.
The study comes as Deputy Prime Minister and housing minister Angela Rayner has pledged to build more affordable homes and cut back on Right to Buy sales.
The thinktank’s report says these former council homes are now worth an estimated £430bn (at 2024 prices) after taking account of inflation and the surge in property prices since 1980.
Of this sum, the thinktank adds that £194bn represents the value that was “effectively given away for free through the discount”.
The report points out that this transfer of wealth from the state to homebuyers has had two major consequences.
It says: “First, is a worsening of the housing crisis — through the collapse in social housebuilding — and its wedding to market forces via private cross-subsidy –, councils’ inability to respond to local housing need and the pivot from subsidising supply to subsidising demand.”
The second has been “a weakening of council balance sheets, rendering them especially fragile when the onslaught of austerity began in 2010”.
The thinktank says the amount of “housing equity given away from free” is now worth 1.6 times the remaining stock within England local authorities’ Housing Revenue Account — valued at around £122bn in 2022, and more than double the sum of all net liabilities in the form of debt securities and loans across local government, put at £92bn as in December 2024.
“Financially speaking, the public sector was, in our view, wrong to sell such a volume of assets at such discounts, given that the unsustainable dynamics of asset price inflation,” says the report called, Wrong to Sell: How Right to Buy gave away billions in public wealth.
Last month, Rayner (who bought a home as a Right to Buy tenant) set out plans to build around 300,000 affordable homes with the £39bn of funding she secured from the June spending review.
The Deputy Prime Minister added that at least 60% of these homes will be for social rent, linked to local incomes, which would mean delivering around 180,000 homes for social rent. This figure is six times higher than the decade up to 2024.
Rayner also plans to place tougher restrictions on Right to Buy sales in a bid to maintain council housing stocks, including extending the minimum time a council tenant must live in their home from three to 10 years before they can buy it at a discount.
