Housing secretary considers cutting the discount despite previously benefiting from it
Source - Daily Telegraph - 03/09/24
Angela Rayner is preparing to rip up Margaret Thatcher’s Right to Buy policy despite previously benefiting from the scheme herself.
The housing secretary is considering abolishing the scheme for newly built council houses and cutting the discount offered to existing tenants.
The deputy prime minister is facing growing pressure from local authorities to reduce the cost of Baroness Thatcher’s flagship policy, and a consultation on proposals will be launched in October’s Budget.
More than 100 local authorities called for the scheme to be axed on new council homes in a damning report into the state of Britain’s housing stock published on Tuesday. The report, commissioned by Southwark Council, said the policy was helping to burn a £2.2bn hole in local authority accounts and exacerbating the country’s housing crisis.
Ms Rayner attended an “urgent meeting” with local authorities last month to discuss housing reforms. The Ministry of Housing and Local Government told The Telegraph: “We are working at pace to reverse the continued decline in the number of social rent homes.”
Shadow housing secretary, Kemi Badenoch, said it was “no coincidence” that Labour “wants to destroy one of Baroness Thatcher’s most transformative policies”. It comes after Sir Keir Starmer removed Baroness Thatcher’s portrait at Number 10 last week after his biographer reported he found it “unsettling”.
The Tory leadership candidate added: “If Angela Rayner was serious about improving people’s lives, she would be finding ways to increase housebuilding, rather than cutting a programme that gets people on the housing ladder and gives them a stake in their communities.”
It comes as Ms Rayner is also championing a law that will give workers new rights to demand a four-day week.
Right to Buy, the brainchild of Baroness Thatcher, allows council tenants to buy their homes from their local authority at a discount of up to 70pc.
View of the house which Deputy Labour Leader Angela Rayner bought under the Right to Buy scheme
Ms Rayner bought her former council house in Stockport for £79,000 in 2007 Credit: Ryan Jenkinson/Story Picture Agency
In 2007, Ms Rayner used the scheme to buy her former council house in Stockport, Greater Manchester, for £79,000 after claiming a 25pc discount. She later sold the property for £48,500 more than she paid for it.
The purchase led to a police probe in May this year, after Tory MPs alleged that she breached electoral law, failed to pay capital gains tax and falsely received a single-occupancy council tax on the property. The investigation was later closed after no wrongdoing was found.
In Southwark Council’s report, local authorities said Right to Buy had created “a serious problem for the sustainability of England’s council housing”. Ms Rayner said in the summer that the Government was considering protections for new council homes.
Discounts on the scheme can reach as much as £75,000 outside of London, and over £100,000 in London. The cap, which is based on how long a tenant rents a property before buying it, is limited to £136,400 in London.
Labour MP, Clive Betts, said: “They’ll [the Government] most likely reduce the discounts to a trickle. That’s what the last Labour government did and it effectively stopped Right to Buy from happening. They reduced the discounts until it no longer happened.”
New Labour cut Right to Buy discounts in 1999, and again in 2003, down to £16,000 outside of London and the south east where they remained at £38,000. Sales bottomed as a result, falling from the one million high recorded in the first decade of the scheme to just 2,340 by 2009.
The Tories then increased the discounts available to what they are today.
In the last financial year, 10,896 homes were sold through Right to Buy and only 3,447 were replaced, official figures show – resulting in a net loss of 7,449. Since 1991, the scheme has resulted in a net loss of 24,000 social homes.
This is partly because under the current system, councils can only keep a third of the receipts from each sale to build a replacement home, with the rest going to the council and government for other purposes.
Councils said that “underestimated” maintenance costs, changing government policy and economic shocks had also contributed to the multi-billion-pound shortfall.
In March, Manchester’s Labour mayor, Andy Burnham, called for Right to Buy to be “suspended” to allow “councils the breathing space they need to replenish their stock”.
The Housing Forum, a body of local authorities, housing associations and housebuilders, said in April that Baroness Thatcher’s scheme was being “abused”.
It found examples of properties being bought with gifts or loans from other family members, or after families had fallen into rental arrears and claimed benefits shortly beforehand.
In some cases, the report said, council homes were being let out on the private market shortly after being bought.
A government spokesman said: “We are facing the most acute housing crisis in living memory and that is why we are working at pace to reverse the continued decline in the number of social rent homes.”
The Government has already fed £450m in funding to local authorities to alleviate soaring waiting lists for council housing.
Possible changes to the Right to Buy scheme are expected to form part of a broader plan to boost council housing under Labour.
A government spokesman added: “We have made clear we will give councils and housing associations the stability they need and will set out further details at the next spending review.”
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