The Right to Buy (RTB) scheme resulted in councils handing over £82bn to tenants, think tank says.
According to a report by the Common Wealth think tank, the discounted sale of houses through the RTB scheme since 1980 has seen councils hand ‘£39bn in cash terms, or £82bn in today’s money’ to tenants.
Chris Hayes, Common Wealth chief economist, argues that RTB allowed almost £200bn of public wealth to be ‘given away’, rendering the system one of ‘the largest privatisation[s] in UK history, second only to land’.
Hayes emphasises that due to inflation, the scheme ensured a ‘considerable opportunity cost’ for councils, as well as contributing to a ‘worsening’ of the UK’s housing system.
The report highlights the ‘intensifying crisis of housing affordability’ since the 1980s, compounded by the introduction of Margaret Thatcher’s policies, which enabled the sale of 1.9 million council homes at roughly 44% lower than market value.
Among the consequences of RTB, the report lists the decline of social housebuilding and ‘councils’ inability to respond to local housing need’, as well as its negative impact on council balance sheets.
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