Right-to-buy sales continue at low levels
31 years ago this week the Housing Bill that paved the way for 2.5 million council home sales under the right-to-buy scheme was introduced. Since then, the scheme – introduced by Margaret Thatcher – has been embraced by governments of all persuasions and has enabled millions of people to get a foot on the housing ladder.
Analysis of government data by HSBC shows that in the tax year, 2009/10, just 4,622 right-to-buy sales took place across the United Kingdom. This is down from 6,716 in 2008/9 and represents a fraction of the 193,600 that took place in 1982/3. Right-to-buy sales have been steadily reducing since 2003/4 (91,988) when incentives for buyers were reduced.
Since its introduction, Local Authorities have received £45.5 billion capital receipts for the right-to-buy scheme. With an average discount of 47% on the property value over this period, the value of assets given away amounts to £40.4 billion.
The total value of council homes sold amounts to £85.9 billion, making it by far the largest ‘privatisation initiative’. The value of council homes sold exceeds the value of the entire privatisation programme put together
Martijn van der Heijden, head of lending at HSBC, said: “The right-to-buy initiative has its supporters and detractors, and was a central plank in the Conservative party housing policy in 1980. Since then, successive governments have embraced the policy.
“The scheme has been facing scrutiny lately with the current shortage of council housing stock. However, no-one can deny the major impact it has had on homeownership in Great Britain and the massive windfall gains to millions of council house sitting tenants.”