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17/02/2025
The Right to Buy scheme, introduced in 1980 under Margaret Thatcher, has enabled millions of council tenants to purchase their homes at discounted rates. The policy facilitated homeownership for many but also led to a significant reduction in the availability of social housing.
In response, the government announced substantial changes to the Right to Buy rules. The discounts offered to council tenants were significantly reduced from 21 November 2024 and a consultation on further changes took place between 20 November 2024 and 15 January 2025.
From a conveyancing and property perspective this has triggered a surge in Right to Buy transactions as tenants, who may have been considering buying their home for some time, are bringing their plans forward to avoid the potentially less favourable Right to Buy Rules in the government’s consultation document.
What Right to Buy rule changes were implemented on 21 November 2024?
- Reduction in maximum cash discounts: The most significant change was the reduction of the maximum cash discounts available to tenants purchasing their council homes. Previously, the discounts were up to £102,400 across England and £136,400 in London boroughs. However, these discounts have now been lowered with new maximums ranging from £16,000 to £38,000, depending on the property’s location.
- Extension of the cost floor period: The cost floor period, which determines the minimum price at which a property can be sold under the Right to Buy scheme, was extended from 15 to 30 years. This change aims to ensure that councils can better recover the costs of building or acquiring new properties before they are sold at a discount.
Proposals in the government consultation document on Right to Buy
Key proposals under consideration include:
- Eligibility criteria: Increasing the minimum tenancy period required before tenants can exercise their Right to Buy. Currently, tenants are eligible after three years of residency; the proposal suggests extending this period to between five and ten years.
- Property exemptions: Exempting newly built social housing from the Right to Buy scheme or imposing significant restrictions on their sale to preserve the availability of new social housing units.
- Post-sale restrictions: Implementing increased restrictions on properties after their sale under the Right to Buy scheme to prevent rapid resale and potential exploitation.
- Replacement of sold homes: Ensuring that each home sold under the Right to Buy scheme is replaced with a new one to maintain the overall number of social housing units.
- Use of Right to Buy receipts: Simplifying the rules governing how councils can use the proceeds from Right to Buy sales to facilitate the replacement of sold homes and support broader housing initiatives.
Implications for Tenants and the Housing Market
These reforms represent a significant shift in housing policy, balancing the desire to promote homeownership with the need to maintain an adequate supply of social housing. Tenants considering purchasing their council homes will need to navigate the new rules, which may require longer tenancy periods and offer reduced financial incentives. For the broader housing market, these changes aim to alleviate some pressures by ensuring that social housing remains available for those who need it most.
The public consultation on reforming the Right to Buy scheme concluded on 15 January 2025. The government is now reviewing the feedback received from various stakeholders, including local authorities, housing associations and the general public. This analysis will inform the development of final policy decisions.
As these reforms are implemented, it will be crucial for tenants and stakeholders to stay informed about the specific changes and timelines. Engaging with local council housing offices and monitoring official government communications will be essential steps in understanding and adapting to the evolving landscape of social housing.
Need advice on Right to Buy or conveyancing?
For advice on Right to Buy or an residential property matter, contact our conveyancing and property team by emailing enquiry@beswicks.com or phoning our Stoke-on-Trent solicitors on 01782 205000 or our Altrincham Solicitors on 0161 929 8494.
