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Why is Right to Buy being phased out in Scotland and Wales?

  1. 13 October 2016
  2. By Rosie Rogers

Reallymoving.com looks at why Scotland and Wales have decided to bring an end to the Thatcherite Right to Buy scheme. 

Right to Buy has been a controversial, divisive scheme since it was first introduced by the Thatcher government in 1980. In essence, it is a policy that allows secure council house tenants and some housing association tenants the legal right to purchase, at a large discount, the home they reside in. Since 1980 some 2 million people have brought their home in this way. 

Supporters of the scheme say millions of people who wouldn't have been able to buy a home otherwise have been able to thanks to Right to Buy, in turn helping to secure the financial futures of these families as well as giving a boost to the national finances. Home ownership has long been a British obsession, those in favour of Right to Buy say the policy has helped to increase levels of it. 

Critics, however, point to the loss of social housing stock (which hasn't been adequately replaced), the creation of a national house price bubble and the fact that valuable council assets were sold off at below market value, leading to a shortage in homes for low-income households. What's more, a 2013 report found that 36% of homes (52,000) sold under Right to Buy in London are now in the hands of private landlords, suggesting that the core ethos of the policy – to increase home ownership levels – has not actually been achieved. 

While Right to Buy is still ongoing and being expanded in England – it was, after all, a key policy for the Conservatives during their surprise election win last May – both Scotland and Wales have decided to abolish the scheme. As of August 1 2016, the Scottish government ended Right to Buy for all council and housing association tenants as a part of the Housing (Scotland) Act 2014. This followed a consultation on the future of Right to Buy in 2012 and a decision in July 2013 to abolish the scheme by 2017. 

The move was fully welcomed by Scottish housing bodies, with the Scottish Federation of Housing Associations (SFHA) stating that the ending of the scheme “hasn't come a moment too soon”. In the last 37 years a total of 494,580 council and housing association homes were sold under Right to Buy in Scotland. However, critics have said this has contributed massively to an acute shortage of social housing and the scheme has no place in modern Scotland, with a housing policy based on making social housing truly affordable for people on low incomes. 

Kevin Stewart, Scotland's Housing Minister, said the decision to end Right to Buy will help to protect the country's social housing stock, with 15,500 social homes safeguarded from sale in the next decade. The Scottish Conservatives, unsurprisingly, have criticised the move to scrap the scheme, calling it 'political dogma'. 

While the scheme is already dead in Scotland, Wales is set to follow in scrapping one of the flagship policies of the Margaret Thatcher era. Although no exact timetable has been given for when the policy will be ended, Wales is expected to introduce similar legislation to Scotland within the next 12 months. Across Wales, nearly 140,000 homes have been purchased by council and housing association tenants under the Right to Buy scheme since 1980. 

Again, though, the criticism is that these homes have not been replaced. In fact, Welsh Labour says the number of homes sold as a result of Right to Buy accounts for 45% of the principality's social housing stock. Furthermore, research suggests that 40% of Right to Buy property in Wales has either directly or indirectly ended up in the private rented sector. 

Carwyn Jones, first minister for Wales, said when announcing his devolved government's plans to scrap the scheme: “We must safeguard our social housing stock. This bill will seek to protect that stock from further reductions. The analogy I have used before is that it is like trying to fill the bath up with the plug out.”

With the government in England determined to revive and expand a scheme that many think has had its day, the administrations in Scotland and Wales have decided to scrap Right to Buy to protect their remaining social housing stock. 

Housing bodies, those on low incomes and those who think Right to Buy has simply helped to exacerbate the housing crisis by reducing stock and inflating house prices, will be very pleased with the news and will be hoping that Theresa May has a rethink of her own. Supporters of the scheme, however, say it smacks of anti-aspiration and anti-ambition – a politics where the government knows best, not the individual. 

There seems little appetite for an extension of the Right to Buy scheme – which would appear to have little relevance to the housing market as it currently stands – but that is what the current government plan to do. The Welsh and Scottish governments have taken a very different approach. It will only become clearer, over time, who has called it right. 

Download our complete guide to Right to Buy in England for more information on the scheme in England.

 
 

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