The Right to Buy (RTB) will be abolished in Wales tomorrow, Saturday 26 January 2019. Also being abolished are the less well known rights to buy social housing: the Preserved Right to Buy, the Extended Right to Buy and the Right to Acquire.
RTB has simultaneously been one of the most popular and controversial housing policies of the last four decades. While now largely identified as a key policy of the Conservative government led by Margaret Thatcher, the policy was actually a commitment in the Conservative’s October 1974 election manifesto when Edward Heath was leader. Local authorities were already selling homes on a voluntary basis in the 1970s, but it wasn’t until 1980 that a legal right to buy your council house was introduced.
Under RTB, tenants were initially entitled to a substantial discount off the market value: a minimum of 33% where they had been a secure tenant for at least three years and up to 50% if they had been a secure tenant for four years or more (depending on how long they had been a secure tenant). The discount was initially capped in cash terms at £25,000. To put that in context, the average price of a home in Wales in 1980 was £19,000. Buying a home for less than £10,000 was therefore a reality for many. By the end of the first quarter of 1981 some 28,000 people in Wales had applied to buy their own home under RTB.
While RTB allowed many families to become homeowners, it was criticised for its part in reducing the availability of social housing. Since 1980 the total social housing stock in Wales has fallen from over 300,000 to around 230,000 in 2018. While new social homes have been built, almost exclusively by housing associations, they have not been built in sufficient numbers to replace the stock that was sold through RTB. Local authorities may have wanted to build new homes with the RTB receipts, but the way local authority housing was financed meant it did not happen.
The Welsh Government has taken steps over a number of years to dis-incentivise RTB and, to protect the social housing stock from further reduction. Discounts were reduced to a maximum of £8,000 – that compares with a maximum discount of £50,000 in the 1990s. In seven local authorities across Wales, RTB has already been suspended using powers under the Housing (Wales) Measure 2011.
The Abolition of the Right to Buy and Associated Rights (Wales) Act 2018 received Royal Assent in January 2018. However, tenants considering purchasing their home under RTB had a twelve month notice period prior to abolition, with landlords obliged to provide them with information about RTB ending. Tenants in areas where RTB was already suspended had no further opportunity to buy their home.
Wales has followed Scotland in abolishing RTB, but devolution has highlighted a clear divergence from England where, since 2012, there has been a policy to incentivise and expand RTB. The maximum RTB discount in England currently stands at £80,900, except in London where it’s £108,000.
RTB retains political support from the Welsh Conservatives who recently launched their new housing strategy (PDF, 1.3MB). It commits to reintroducing a reformed RTB with proceeds from sales being reinvested into new social housing if they enter government.
You can read more about the Abolition of the Right to Buy and Associated Rights (Wales) Act 2018, and the history of RTB in Wales, in this updated briefing paper from the Research Service.
Abolition of the Right to Buy and Associated Rights (Wales) Act 2018 (PDF, 465KB)
Bilingual Glossary (PDF, 97KB)
Article by Jonathan Baxter, National Assembly for Wales Research Service
