New Council Homes Might Not Be Eligible For Right to Buy

Changes to Right to Buy might prevent new council homes from being sold under the scheme.

Angela Rayner, the Deputy Prime Minister tasked with delivering the government’s ambitious housing policy, indicated the changes are likely to prevent the government from “losing that stock”.

The Right to Buy scheme was introduced by the Conservatives under Margaret Thatcher in 1981. It aimed to increase homeownership and allowed council tenants to purchase the property they lived in, often at a discount.

Around two million homes have been sold under the scheme, with very little of the money earned through these sales going towards building new council homes.

With approximately 1.3 million people on the social housing waiting list in England, the scheme has come under criticism for increasing homelessness and the lack of new council homes to replace the ones sold.

Rayner stated: “we’ll be putting restrictions on them so that we aren’t losing those homes … we’re not losing that stock.” She added that she wants to see “the biggest wave of council housing in a generation and that is what I want to be measured on”.

While the government has committed to retaining the scheme, it has announced it will reduce the discounts available to council tenants.

The current maximum discount is £102,400 outside London and £136,400 inside London and is available if you apply for the scheme before 21 November 2024.

If you apply after this date, the discount is significantly reduced. Depending on where you live, it will be £16,000 to £38,000. We’ve broken down the discount you can expect to receive by region below.

These changes won’t affect the new stock set to be built if the government follows through on its promise to ringfence new council properties from the scheme.

This follows decisions by the devolved Scottish and Welsh governments to end the scheme in 2016 and 2019, respectively.

The plan should see more council stock become available. Since the stock has dwindled significantly since the scheme’s introduction, this will be welcome news for people on the social housing waiting list.

However, it does leave the long term future of Right to Buy in question. Will the government keep the restrictions on new council stock in place? A future Conservative government could overturn the decision and allow tenants to purchase their new council homes.

For the time being, it’s imperative that Labour meets its election pledge to build 1.5 million new homes by the end of the current parliament in 2029. This will go a long way to improving the country’s housing situation and provide an alternative to homeownership from Right to Buy.

What do the changes mean for you?

The good news is that if you’re looking to buy your council home, you still can. The government has confirmed that the scheme won’t be discontinued.

The bad news is that you will receive a much smaller discount unless you apply before 21 November 2024. You’re likely to need a deposit alongside the discount now before you make an application.

Another option is to consider one of the government mortgage schemes available, but none include a discount on the scale of Right to Buy. Plus, you will have to move properties. So, if you have your heart set on buying your council property, this is an issue.

If you find yourself in this situation, speaking to one of the advisors we work with is a good idea. They can advise on the best course of action given your circumstances and the changes in the Right to Buy scheme.