Right to Buy Demand Soars

The government’s Right to Buy scheme was launched by Margaret Thatcher in 1980 to encourage council tenants to buy their homes. I was researching how it has evolved especially in the light of the rising demand for housing stock. There was an article in the Daily Mail on 27th August and it raises some issues.

The article writes: The number of homes sold through the government’s Right to Buy scheme is up more than a third compared with last year. Figures from the Department for Communities and Local Government show 2845 houses were built through the scheme between April and June this year. That is 31% more than the 2171 bought in the same quarter last year. London was the most popular area, accounting for a third of right to buy purchases. Nationally, councils made a total of £210.8 million from the sales in the past year, with an average £74,000 paid for the property. It is an increase of more than 60% from the amount raised through sales in the same period last year. Since the launch of the Right to Buy, around 2 million properties were sold in the following three decades. In 2012, the scheme was reinvigorated to offer discounts of up to £75,000 on properties to encourage tenants to buy. The discount was increased in March 2013 to £77,000 and to £102,700 for London borough tenants. ‘Council house building starts are now at a 23 year high’, says Brandon Lewis, Housing and Planning Minister.

The thing I find difficult to understand about the Right to Buy scheme is that councils are having difficulty finding homes for new council tenants, and yet then they build new council houses then sell them off. I can see that if tenants are then taking over the responsibility of looking after their houses this then saves the council money as it has less housing stock to maintain. This is a viable solution as long as demand plateaus soon, easing up on the currently escalating demand for new build housing.

Richard Butler Creagh

 

Richard Butler-Creagh

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About Richard Butler-Creagh

Career & Henley Finance Ltd

Posted on August 27, 2014, in Property Business, right to buy and tagged . Bookmark the permalink. Leave a comment.

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