Right to Buy: the public’s loss, the landlords’ gain
Right to Buy (RTB) has cost the British taxpayer almost £200 billion since Margaret Thatcher’s Conservative government introduced the scheme in 1980, figures published by the think tank Common Wealth reveal. By slashing social housing and raiding councils’ pockets, the policy has contributed to an affordability crisis that has led to sky-high rents and housing costs, lengthy waiting lists for social housing, and is now putting our Green Belt at risk of development.
The controversial scheme enabled former tenants to buy council housing at heavily discounted prices. In a new report, Common Wealth calculated the total value of homes sold under RTB is equivalent to £430 billion today. Yet, councils only received the equivalent of £104 billion in today’s money (or £51 billion in nominal terms). This is largely because the former council homes were sold at rates, on average, 44 percent below the market value. In total, Common Wealth finds, councils lost the equivalent of £194 billion in today’s money as a result of these discounts.
While RTB offered many a foot on the housing ladder, benefiting some families, the scheme also left the country woefully short of social housing, eating up much of the existing council housing stock without sufficiently replenishing supplies. As the report explains, RTB rescinded councils’ right not to sell, while – crucially – actively blocking local authorities’ ability to reinvest the proceeds into building new homes that could replace those lost through the scheme. The Local Government and Housing Act (1989), for instance, obliged councils to direct as much as 75 per cent of proceeds towards reducing debts. Councils, who are already operating at a loss due to the discounts, are not only disincentivised from building new housing that may soon be resold but are simply unable to replace council housing on a one-to-one basis.
The Labour government has acknowledged the policy’s role in the housing crisis, stating: “The failure to replace the homes which have been sold under the scheme is a contributor to the urgent and rising need for social and affordable homes in most communities across the country. The cost of this has been borne not only by those low-income families unable to secure a social home, but by the taxpayer in the form of a rapidly rising housing benefit bill.” In the response to a consultation on reforming RTB, published in July this year, the government proposed a series of amendments to the legislation, including reducing discounts, adjusting eligibility criteria and expanding the number of properties exempt from the policy – but is it too little, too late?
According to Common Wealth, the scheme has seen 1.9 million council homes sold, many now owned by private landlords. The think tank reports 41 percent of properties sold under the RTB scheme are privately rented, but concludes the true figure is likely to be higher. Meanwhile, social housing comprises just 16 percent of the housing market – almost half of what it was in 1980 (31 percent). (Read more about the roots of the housing crisis and astonishingly high waiting lists for social housing here.) Instead, cash-strapped local authorities are spending fortunes on short-term measures. Temporary accommodation is costing the London boroughs £4 million a day – leading London Councils to declare the homelessness crisis the “single biggest risk” to local authorities’ finances.
In short, RTB was one of the largest giveaways of public assets in Britain’s recent history. Previously affordable housing overseen by councils has been replaced by unaffordable housing, much of it privately rented, often with councils footing the bill in the form of housing benefits. As such, it is a key contributor to the housing affordability crisis facing London and the rest of the UK.
At CPRE London, we have joined with Just Space in calling on the Government to protect social housing by ending RTB and committing to repurchasing homes sold under the scheme. (See our Housing Charter.) We have previously explained that we are not facing a housebuilding crisis but an affordability emergency. Ripping up planning regulations and building on the green belt is not going to fix the problem. Instead, we need a 20-year housing strategy that addresses the issues impacting the housing sector, centring on the notion that homes should be a safe and secure shelter, not an investment opportunity. (Read more in our Letter to London.)
Figures and statistics included in the article were sourced from “Wrong to Sell: How Right To Buy Gave Away Billions in Public Wealth”, Common Wealth, 2025, unless otherwise stated.
