‘Picking up the tab’ for Right to Buy
Moat responds to new analysis revealing that there is only one council house built for every 21 sold off, saying it is more evidence that Right to Buy gifts a lot of public money away without giving taxpayers much in return.
Despite the strong attachment that some MPs feel towards Right to Buy, this new analysis demonstrates the need to review its value and effectiveness. Even with assurances over one-for-one replacement it is quite clear that we are continuing to lose stock as a result of the policy.
Moat research has found that the overall stock shortage, which is being exacerbated by Right to Buy sales, is forcing local authorities to house more low income earners in privately rented accommodation. This effectively places the poorest people in the most expensive homes, leaving Housing Benefit to pick up the bill.
There is also evidence to suggest that over a third of homes sold under Right to Buy are now being rented out at market rents – often to people Housing Benefit. This effectively transfers the income raised by rents into private hands, with the state once again picking up the tab.
In a straightforward value for money evaluation, there is little doubt that the aspiration of home ownership can be more effectively supported by other products. For example, shared ownership can be used to help people into home ownership, whilst still allowing for the recycling of grant at the point of staircasing and at eventual full sale. This is in stark contrast to the sunk cost of a Right to Buy sale which gifts a lot of public money away without giving taxpayers much in return.
