Right to Buy plummets amid higher borrowing
The number of social housing tenants buying their homes from local authorities fell by one third across the North last year, as higher interest rates hit people’s ability to access loans.
There were 2,471 sales through Right to Buy in North East, North West, and Yorkshire and the Humber in 2023/24, down from 3,558 the year before.
Across England, sales fell even more sharply, down by 43%. The high level experienced before Covid was more than 50% above today’s.
The latest figures were published by the Ministry of Housing, Communities & Local Government at a time when metro mayors are calling for Right to Buy to be suspended.
The mayors argue that as new social housing stock is built at a slower rate than Right to Buy homes are being sold, the scheme erodes the overall volume of social accommodation in England. Greater Manchester Mayor Andy Burnham likened it to filling the bath with the plug out.
A Local Government Association spokesperson agreed: “Whilst the Right to Buy can and has delivered home ownership for many, the current form does not work for local authorities and many of those most in need of housing support are simply unable to access secure, safe social housing.
“It is time for the Government to overhaul a system which has seen our social housing stock significantly diminish. If the Government adopts our proposals set out in our White Paper this would allow councils to resume their role as a major builder of affordable homes, which support strong and healthy communities and help to build prosperous places.
“While we can’t know for sure, it is likely that high borrowing costs have resulted in fewer sales of homes as people can’t afford the mortgages. The RTB system results in a net-loss of social homes though, as councils can’t replace them quickly enough which will lead to fewer sales.”
The number of Right to Buy sales has historically been higher in Yorkshire than other parts of the North, and continued along this trend in 2024.
Right to Buy in the North:
- Yorkshire: 1,424 sales in 2024, compared to 2,083 in 2023
- North West: 432 sales in 2024, compared to 744 in 2023
- North East: 561 sales in 2024, compared to 731 in 2023
Tenants who qualify for Right to Buy benefit from a discount against market value for their property, capped at a £96,000 discount in the English regions outside London in 2023/24. The Government encourages councils to use receipts from sales to build new social housing.
The average price of a sale under Right to Buy in the North West rose by 7.7% in the past year to £68,000, the greatest rise of any English region. Prices rose 1.4% in the North East and fell by 2.4% in Yorkshire.
The total number of eligible sales in England last year was 6,275 and the number of replacements coming into the social housing estate was 3,037.
The government’s own target number for replacements has not been hit since 2017/18.
The Right to Buy was introduced in 1980 and so far more than two million people have become home owners as a result.
Chancellor Rachel Reeves is expected to introduce an above-inflation rise on social housing rents to help fund housing associations in her Budget on 30 October.
There are numerous variables which affect the picture across the country and make comparisons difficult between the regions: the amount of local authority social housing stock, the proportion held by the private sector, the duration a tenant has occupied council housing, and house price differences.
Sources for all data: MHCLG.
Not sure how much this is mortgage rates. Where social housing to which RtB applies comes available for new tenants, which doesn’t happen in big numbers particularly family-sized homes, it goes to people with the most points which generally involves homelessness, medical and welfare issues, and/or not being able to be directed towards the private rented sector. These tend to be people in much less of a position to be able to buy, and such people will form a bigger and bigger proportion of the tenant base as time goes on, on top of longer-term tenants who already would have bought if they could.
In some of the better areas, almost everything has already been bought – the pool of properties and tenants for which RtB applies will keep diminishing.
Smaller flats become available more often, but tenants often have similar financial issues, and in bigger blocks flats often aren’t mortgageable due to construction methods.
In theory, tenants’ financial positions may later improve, but when someone who has previously demonstrated very difficult personal circumstances to get maximum housing points suddenly comes up with a large sum of money, it can mean that wider family members or others – and not the tenant – are cheating the system to make some money off the back of the RtB discount. It’s difficult to check this though, or some landlords make no attempt.
Either way, doing away with RtB entirely isn’t likely to be the vote loser for Labour it would have been 10-20 years ago.
By Tower Blocked
RtB isn’t relevant or sensible to continue with in 2024 with a growing population, a housing crisis, generation rent and a lack of new homes being built together with news that there is a collapse in s106 demand for social housing from RPs . We can’t even fill what’s becoming an empty bath.
By not the '80's