Over 40% of council houses and flats sold under the long-standing Right To Buy scheme are now owned by private landlords.

That’s the claim from the New Economics Foundation (NEF) which found that some 109,000 former council homes have started being let privately in the last 10 years alone. 

The think-tank says the RTB policy effectively forces many households into private renting, when the properties were built originally to reduce pressure on social housing waiting lists.

NEF, which sent Freedom of Information requests to local authorities as part of the study, found 86% of RTB homes in Brighton are now being privately rented. Milton Keynes has 73% and Dover 59%.

The Right to Buy gives council tenants the right to purchase the home they are currently renting from a local authority at a discount. Tenants are eligible to purchase after they have been a social tenant for three years, and the discounts go up for each year they are a tenant, to a maximum of 70% of the property value, capped at £96,000 (or £127,900 in London).   

Sales were highest during the 1980s, with over 1.4m homes sold between 1980 and 2000. In 1999 discounts were significantly reduced, and sale rates fell sharply after the 2008 financial crash. In 2012, a beefed up version of Right to Buy increased sales to where they are today, at up to 12,000 per year.   

In recent weeks an industry group – the Housing Forum – has called for restrictions on how properties bought in the future via RTB can be let out. It wants covenants should be placed on sales to either prevent the property from being let out, or alternatively to require them to be offered to the council to let, if they are not being used for owner-occupation.   

And the newly re-elected Mayor of Greater Manchester – Andy Burnham – says Right To Buy as a government policy should be either abandoned or heavily restricted.

“Just as Greater Manchester was first to end deregulation of buses, we now want to see the suspension of the right to buy policy from any new council homes we build in our city-region” as part of a plan to solve the housing crisis.

“One of the main reasons why the country has not built enough social homes for decades is because of the Right To Buy policy. Councils do not have an incentive to fund the building of new homes if they can be sold off cheaply and quickly. In the face of a desperate housing crisis, the existence of right to buy means we are in effect trying to refill a bath without being allowed to put the plug back in.”

He proposes to build “a new generation of council homes” in all 10 boroughs of Greater Manchester and at least 10,000 within this four year mayoral term. 

Hollie Wright, assistant researcher at the New Economics Foundation, says: “While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system. There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of Right To Buy”.

She says that by forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. 

To help get councils building again, NEF recommends devolving powers over RTB  from Westminster to local councils, including giving them the ability to: 

– Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages;

– End right to buy for newly built or acquired homes; 

– Prevent sold right to buy homes from being let in the private rented sector (PRS); and

– Reduce discounts and extend qualifying periods.