Angela Rayner’s overhaul of Margaret Thatcher’s flagship Right to Buy (RTB) scheme will mean half a million tenants will no longer be able to buy their own homes.

Rayner is proposing to change the discount formula and increase the requirement for tenants to have lived in their homes for at least three to over ten years to qualify for the scheme.

Although Right to Buy has been hugely successful and has enabled more than two million tenants to become homeowners, it has also been blamed for causing a severe shortage of social housing, although it has also helped supply letting agents with a steady stream of properties to rent or sell as former council tenants have moved on from their Right to Buy homes.

It was hoped that councils would be able to use the money RTB generated to build replacement homes, but as a result of various rules and restrictions, the money has mostly been used elsewhere.

The biggest wave of council housing in a generation.”

It is why Rayner has pledged “the biggest wave of council housing in a generation.”

Cara Pacitti, of the Resolution Foundation, said: “New restrictions being proposed by the Government will effectively mark the end of Right to Buy. But the job of replenishing Britain’s affordable housing stock has only just begun.”

Research by the Foundation, however, has found that RTB purchases had fallen to just 11,000 in 2022-23 and with 62% of England’s remaining social housing stock ineligible because it is owned by housing associations, so the changes may not have as big an impact as expected.

It would therefore be better, Pacitti said, if the Government focused on exempting local authorities’ new-build homes from the RTB to ‘future proof the social housing stock’.

Monumental task

The foundation also warned that the Government faced a ‘monumental’ task to replenish social housing stock, which, despite a substantial increase in the UK’s population, had fallen by more than 25% since its heyday in the 70s.

The report claims councils will need to build 400,000, or one in four of the Government’s 1.5 million new homes target, at a cost of £50 billion just to get back to 2010 levels.

Pacitti concludes that although RTB is now over: “The job of replenishing Britain’s affordable housing stock has only just begun.”

And that task just got harder after a survey by Southwark Council found that 71% of the councils they questioned expected to abandon, pause or delay existing council housing developments and another 68% were preparing to scale back their development plans.