The Right to Buy scheme is a policy in the United Kingdom, with the exception of
Scotland
Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
since 1 August 2016 and
Wales
Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
from 26 January 2019, which gives
secure tenants of
councils
A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature, especially at a town, city or county/ shire level, but most legislative bodies at the state/provincial or nati ...
and some
housing association
In Ireland and the United Kingdom, housing associations are private, Non-profit organization, non-profit making organisations that provide low-cost "Public housing in the United Kingdom, social housing" for people in need of a home. Any budge ...
s the
legal right
Some philosophers distinguish two types of rights, natural rights and legal rights.
* Natural rights are those that are not dependent on the laws or customs of any particular culture or government, and so are ''universal'', ''fundamental right ...
to buy, at a large discount, the council house they are living in. There is also a Right to Acquire for
assured tenants of housing association dwellings built with public subsidy after 1997, at a smaller discount. By 1997, over 1,700,000 dwellings in the UK had been sold under the scheme since its introduction in 1980, with the scheme being cited as one of the major factors in the drastic reduction in the amount of
social housing in the UK, which has fallen from nearly 6.5 million units in 1979 to roughly 2 million units in 2017, while also being credited as the main driver of the 15% rise in home ownership, which rose from 55% of householders in 1979 to a peak of 71% in 2003; this figure has declined in England since the late 2000s to 63% in 2017.
Right to Buy is the jurisdiction of the
Minister of State for Housing
The Minister of State for Housing and Planning is a mid-level position in the Department for Levelling Up, Housing and Communities in the British government. The position has been held by Lee Rowley since 8 September 2022.
The position was formerl ...
. Critics claim that the policy compounded a housing shortage for people of low income, initiated a national house price bubble, and led ultimately to what is commonly recognised as the displacement and
gentrification
Gentrification is the process of changing the character of a neighborhood through the influx of more Wealth, affluent residents and businesses. It is a common and controversial topic in urban politics and urban planning, planning. Gentrification ...
of traditional communities.
History
![Councilhousing04](https://upload.wikimedia.org/wikipedia/commons/c/ce/Councilhousing04.jpg)
Local authorities have had the ability to sell
council house
A council house is a form of British public housing built by local authorities. A council estate is a building complex containing a number of council houses and other amenities like schools and shops. Construction took place mainly from 1919 ...
s to their tenants since the Housing Act 1936, but until the early 1970s such sales were limited: between 1957 and 1964, some 16,000 council houses were sold in England. The
Labour Party initially proposed the idea of the right of tenants to own the house they live in, in their manifesto for the
1959 UK general election, which they lost. In 1968, a circular was issued limiting sales in cities but was withdrawn by an incoming Conservative government in 1970.
In the meantime, council house sales to tenants began to increase. Some 7,000 were sold to their tenants during 1970; this soared to more than 45,000 in 1972.
Thatcher policies
After Margaret Thatcher became
Prime Minister
A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...
in May 1979, the legislation to implement the Right to Buy was passed in the
Housing Act 1980
The Housing Act 1980 was an Act of Parliament passed by the Parliament of the United Kingdom that gave five million council house tenants in England and Wales the Right to Buy their house from their local authority. The Act came into force on 3 Oc ...
.
Michael Heseltine
Michael Ray Dibdin Heseltine, Baron Heseltine, (; born 21 March 1933) is a British politician and businessman. Having begun his career as a property developer, he became one of the founders of the publishing house Haymarket. Heseltine served a ...
, in his role as Secretary of State for the Environment, was in charge of implementing the legislation. Some 6,000,000 people were affected; about one in three actually purchased their housing unit. Heseltine noted that "no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people". He said the right to buy had two main objectives: to give people what they wanted and to reverse the trend of ever-increasing dominance of the state over the life of the individual.
He said: "There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered. It reflects the wishes of the people, ensures the wide spread of wealth through society, encourages a personal desire to improve and modernise one's own home, enables parents to accrue wealth for their children and stimulates the attitudes of independence and self-reliance that are the bedrock of a free society."
The sale price of a council house was based on its market valuation, discounted initially by between 33% and 50% (up to 70% for council flats), which was said to reflect the rents paid by tenants and also to encourage take-up; the maximum discount was raised to 60% in 1984 and 70% in 1986. By 1988, the average discount that had by then actually been given was 44%.
The local authority was obliged to offer a mortgage with no deposit. The discount depended on how long tenants had been living in the house, with the proviso that if they subsequently sold their house within a minimum period they would have to pay back a proportion of the discount. The policy became one of the major points of
Thatcherism
Thatcherism is a form of British conservative ideology named after Conservative Party leader Margaret Thatcher that relates to not just her political platform and particular policies but also her personal character and general style of manag ...
.
The policy proved immediately popular. Some local Labour-controlled councils were opposed, but the legislation prevented them from blocking purchases and enabled them to redeem debt. Sales were much higher in the south and east of England than in
inner London
Inner London is the name for the group of London boroughs which form the interior part of Greater London and are surrounded by Outer London. With its origins in the bills of mortality, it became fixed as an area for statistics in 1847 and was use ...
and
northern England
Northern England, also known as the North of England, the North Country, or simply the North, is the northern area of England. It broadly corresponds to the former borders of Angle Northumbria, the Anglo-Scandinavian Kingdom of Jorvik, and the ...
. Sales were restricted to general-needs housing; adapted properties and those built specifically for older people were exempted from the scheme.
Half the proceeds of the sales were paid to the local authorities, but the government restricted authorities' use of most of the money to reducing their debt until it was cleared rather than spending it on building more homes. The effect was to reduce the council housing stock, especially in areas where property prices were high, such as London and the south-east of England.
In 1982, 200,000 council houses were sold to their tenants. By 1987, more than 1,000,000 council houses in the UK had been sold to their tenants, although the number of council houses purchased by tenants declined during the 1990s.
The Labour Party was initially against the sales and pledged to oppose them at the
1983
The year 1983 saw both the official beginning of the Internet and the first mobile cellular telephone call.
Events January
* January 1 – The migration of the ARPANET to Internet protocol suite, TCP/IP is officially completed (this is consid ...
general election but dropped its official opposition to the scheme in 1985. However, at the
1987 general election, the Conservative government claimed to voters that a Labour government would still abolish the scheme.
When Labour returned to power at the
1997 general election, it reduced the discount available to tenants in local authorities which had severe pressure on their housing stock; this included almost the whole of London.
Right to Buy rules after 2005
The Right to Buy rules were changed in 2005. Five years' tenancy was now required for new tenants to qualify, and properties purchased after January 2005 could no longer immediately be placed on the open market should the owner decide to sell. Such owners now had to approach their previous landlord (council or housing association) and offer them the right of first refusal. If the previous landlord was no longer in existence, for example in cases where the former landlord was a registered social landlord that has ceased business, then the property had to first be offered to the local housing authority.
The time in which a Right to Buy conveyance should take place was reduced from 12 months to 3 months. The
Financial Conduct Authority
The Financial Conduct Authority (FCA) is a financial regulation, financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The ...
(FCA) now governed and regulated most types of mortgage selling.
The FCA's governance of Right to Buy purchases was partly to solve the widespread problem of Right to Buy mis-selling from brokers and solicitors alike. They all had their own agendas, and many were charging excessive fees that were then taken out of their client's discount. The above actions that have been taken coupled with the end of the boom period seem to have brought this problem under control.
In 2009, the
Localis
Localis is an independent think tank that promotes neo-localist ideas. It was founded in 2001 and is currently based in Westminster, United Kingdom.
Its research programme is guided by the concept of neo-localism which it describes as giving plac ...
think tank suggested, as part of a review of principles for social housing reform, that the right to buy should be extended into equity slivers, which could be part-earned through being a good tenant.
The qualifying period changed from 5 years to 3 years in 2018.
Recent changes
At the 2011
Conservative Party Conference
The Conservative Party Conference (CPC) is a four-day national conference event held by the Conservative Party in the United Kingdom. It takes place every year around October during the British party conference season, when the House of Commons is ...
,
David Cameron
David William Donald Cameron (born 9 October 1966) is a British former politician who served as Prime Minister of the United Kingdom from 2010 to 2016 and Leader of the Conservative Party from 2005 to 2016. He previously served as Leader o ...
proposed to increase Right to Buy discounts in order to revitalise the housing market and generate receipts which could be spent on new housing. Social housing professionals expressed concerns over the proposal.
As of 2 April 2012, the Right to Buy discount was increased to a maximum of £75,000 or 60% of the house value (70% for a flat) depending on which is lower. In March 2013, the maximum discount in London was increased to £100,000. The maximum right to buy discount increases each financial year in line with CPI as at the previous September.
The aim of the scheme is, for every additional home sold, a new home will be built for 'affordable rent' at up to 80% of market rent, aimed at maintaining the level of affordable housing while also increasing the number of properties available for those on the waiting list. The five year tenancy criterion will remain, and should the property be sold within the first five years of the original sale, part or all of the discount will be required to be paid back.
The
Housing and Planning Bill 2016 extended right-to-buy to housing association tenants.
Scotland
In July 2013, the
Scottish Government confirmed that Right to Buy would be abolished in Scotland from 2017. It was in the end abolished as a part of the
Housing (Scotland) Act 2014 from 1 August 2016.
Wales
In the summer of 2017, the
Welsh Government
The Welsh Government ( cy, Llywodraeth Cymru) is the Welsh devolution, devolved government of Wales. The government consists of ministers and Minister (government), deputy ministers, and also of a Counsel General for Wales, counsel general. Minist ...
proposed a law to abolish Right to Buy in
Wales
Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
. This law was passed by the
Welsh Assembly
The Senedd (; ), officially known as the Welsh Parliament in English and () in Welsh, is the devolved, unicameral legislature of Wales. A democratically elected body, it makes laws for Wales, agrees certain taxes and scrutinises the Welsh Gove ...
in December 2017, and the scheme ended on 26 January 2019.
Criticisms
The Right to Buy scheme has been criticised for the following reasons:
*Speculating investors were able to buy up council properties through deferred transaction agreements, hastening the rise in property costs;
*Commercially and socially valuable council assets were sold at below their market value or replacement cost, which can be see to be an imprudent waste of public money;
*The remaining stock of council housing was concentrated in undesirable areas with little employment opportunity, further isolating and stigmatising the tenants.
A report published in January 2013 by
London Assembly
The London Assembly is a 25-member elected body, part of the Greater London Authority, that scrutinises the activities of the Mayor of London and has the power, with a two-thirds super-majority, to amend the Mayor's annual budget and to reject ...
member
Tom Copley, From Right to Buy to Buy to Let, showed that 36% of homes sold under Right to Buy in London (52,000 homes) were being rented by councils from private landlords, leading to criticisms that the scheme "represents incredibly poor value for money to taxpayers" since it "helped to fuel the increase in the housing benefit bill, heaped more pressure on local authority waiting lists and led to more Londoners being forced into the under-regulated private rented sector".
A survey in 2013 showed around one third of Right to Buy houses were now owned by private landlords, while the son of the late
Ian Gow
Ian Reginald Edward Gow (; 11 February 1937 – 30 July 1990) was a British politician and solicitor. As a member of the Conservative Party, he served as Member of Parliament (MP) for Eastbourne from 1974 until his assassination by the ...
(Thatcher's housing minister) owned some 40 houses.
In 2015, Alan Murie concluded that "the proposed extension of right-to-buy could not easily be reconciled with the independence and charitable status of housing associations" and that "extending the right-to-buy to housing association tenants revived a previous Parliamentary debate and raised questions about the legal position of charities and the risks faced by housing associations and their funders".
A 2017 BBC survey of council areas where waiting lists were rising showed the councils had bought back houses they had been forced to sell, sometimes at many times the original price. Housing charities criticised the lack of investment in affordable housing.
See also
*
Help to Buy
Help to Buy is the name of a government programme in the United Kingdom that aims to help first time buyers, and those looking to move home, purchase residential property. It was announced in Chancellor of the Exchequer George Osborne's 2013 budg ...
*
The Housing Question
References
Further reading
* Murie, Alan. "Housing and the Environment," in Dennis Kavanagh and Anthony Seldon, eds., ''The Thatcher Effect'' (1989) pp 213–25
*Jones, Colin & Murie, Alan.
The Right to Buy: Analysis & Evaluation of a Housing Policy' (Blackwell Publishing Ltd., 2006).
*Forrest R and Murie A (1990) ''Selling the Welfare State'' second edition London, Routledge.
*Wilson W and Bate A (2015) ''Extending the Right to Buy (England)'', Briefing Paper No 07224, 9 June 2015 House of Commons Library
*Blow E (2015) ''Comparing the Right to Buy in England, Scotland, Wales and Northern Ireland'' Briefing Paper Number 07174, 12 June 2015, House of Commons Library
External links
Right to Buy: buying your council homeat the
GOV.UK
gov.uk (styled on the site as GOV.UK) is a United Kingdom public sector information website, created by the Government Digital Service to provide a single point of access to HM Government services. The site launched as a beta on 31 January 2012, ...
website
* (
Office of the Deputy Prime Minister
An office is a space where an organization's employees perform administrative work in order to support and realize objects and goals of the organization. The word "office" may also denote a position within an organization with specific duti ...
)
{{DEFAULTSORT:Right To Buy Scheme
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English property law
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Law of Northern Ireland
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