The government is considering ending the right to buy on newly built social homes as part of a consultation on the policy published today.
Other measures under consideration include tightening eligibility rules, increasing the restrictions on selling properties bought using right to buy, and introducing like-for-like targets for replacing social rented homes.
Announcing the consultation in a written ministerial statement, the communities secretary Angela Rayner said that social housing is a “crucial national asset”, which cannot be protected and maintained while “councils are losing homes quicker than they can replace them”.
Pointing out that between April 2012 and March 2024, there were over 124,000 right to buy sales, but fewer than 48,000 homes replaced, she said: “The scheme must be reformed so that it better protects the existing stock of social rented homes, provides better value for money for the taxpayer and ensures fairness within the system”.
The eight-week consultation includes a proposal to exempt newly built social housing from the right to buy, either permanently or for a set period which could range from ten to 30 years.
A recommendation to end right to buy for social new builds was included in a report in September, signed by 100 council landlords, alongside other measures intended to secure the future of council housing.
Speaking to LGC this week ahead of the consultation, Southwark LBC leader Kieron Williams (Lab) – whose council commissioned the report – said it was “really fundamentally important” that right to buy should not apply to new build homes, “because you just can’t make the finance of the building work if you don’t know that you’re going to have that future rental income”.
In the consultation, views are also sought on whether homes that have been retrofitted or improved to a high standard should be exempt.
The government is also proposing to reform the eligibility criteria for right to buy – including the possibility of extending the current three-year period that someone must spend as a public sector tenant to qualify to five, ten or more than ten years.
To help increase the supply of social rented stock, the consultation also suggests introducing a target for all homes sold under right to buy to be replaced, “as far as possible, with a home of the same size, tenure and/or location as the home sold”.
And to discourage homes being sold on and let out, the government is proposing increasing the time period in which the council can ask for repayment of some or all of the right to buy discount, if a property is later sold, from five to ten years.
‘Trying to fill a bath when the plug’s not in’
The consultation follows recent announcements from the government on right to buy, with greater flexibility on spending receipts from sales announced in July, and reduced discounts introduced in the Budget.
Following this, consultation is seeking views on amending the percentage discounts on right to buy to “better align” with the new reduced maximum cash discounts, which will apply from tomorrow.
Minimum percentages of between 0% and 5% are under consideration, and maximum percentages of between 5% and 20%.
In contrast, the percentage discounts currently range from 35% to 70% of the property value for houses, and 50% to 70% of the property value for flats.
But the government proposes retaining cash caps “to avoid excessive discounts in high value areas”.
Other suggestions under consultation aim to simplify the rules on using receipts from right to buy, including allowing these to be pooled with grant funding, and removing the current five-year time limit on spending them.
The consultation says that “right to buy is an integral way for social tenants to get on the property ladder” but adds that reforming the policy is “essential to better protect much-needed social housing stock, boost council capacity and build more social homes than we lose”.
Commenting on the consultation’s launch, Ms Rayner said that too many social homes being sold off before they can be replaced “has directly contributed to the worst housing crisis in living memory”.
“We cannot fix the crisis without addressing this issue – it’s like trying to fill a bath when the plug’s not in,” she said.
“A fairer right to buy will help councils protect and increase their housing stock, while also keeping the pathway to home ownership there for those who otherwise might not have the opportunity to get on the housing ladder.”
The Local Government Association (LGA) welcomed the proposals. LGA housing spokesperson Adam Hug (Lab) said that in addition to the “positive” steps already taken by government on right to buy this year, “the measures set out today in this consultation will help further in supporting the replacement of sold homes and to stem the continued loss of existing stock”.
“Councils are keen to deepen our collaboration with the Government to increase affordable housing and help people on council housing waiting lists and record numbers stuck in temporary accommodation,” he added.
Housing sector representatives also voiced their approval of the consultation. Gavin Smart, chief executive of the Chartered Institute of Housing, said that the body had been “very concerned that there are now some 220,000 fewer homes available at social rents than there were a decade ago”.
“The reforms announced today will help to turn this around,” said Mr Smart. “We have already welcomed the decision that councils can reinvest all their receipts from sales, and today’s proposal for further measures to protect newly built homes from the right to buy will also help.”
Mr Smart added that the various measures taken by government “should mean that the right to buy is a much more sustainable scheme than it has been since 2012”.