Government announces reduction in Right to Buy Discounts from 21st November 2024

On 30th October 2024, the Government published its policy paper ‘A review of the increased Right to Buy discounts introduced in 2012’. This follows the Government’s manifesto commitment to review the increased Right to Buy discounts to preserve the current stock of social housing. The current maximum cash discount is £102,400 (£136,400 in London boroughs) which will reduce to £16,000 - £38,000 (depending on location) from 21st November 2024.

The Right to Buy is primarily available to secure council tenants and not to most housing association tenants. The exception is those secure tenants who were living in a council home when it transferred to a housing association as part of a stock transfer and retained their entitlement to Right to Buy (on an assured rather than secure tenancy) – this is known as Preserved Right to Buy).

Whilst the Right to Buy has given social housing tenants access to home ownership, increased discounts have had a negative impact on the stock of social housing, with homes being sold at a faster rate than they can be replaced.  A one-for-one replacement target was introduced in 2012, which has not been met. Since April 2012, there has been over 124,000 council Right to Buy sales and only 48,000 replacements.

Discounts have evidently not been sufficient to allow housing associations and councils to replace sold housing stock. The Government anticipates that a reduction in discounts to pre-2012 levels will enable housing associations and councils to replace homes sold to meet the urgent need for social housing, whilst ensuring that eligible tenants retain the opportunity of home ownership. Under the new scheme, approximately 1,700 social housing tenants will have the opportunity to purchase their home each year. The reduction in discounts is expected to reduce Right to Buy sales by around 25,000 over the next 5 years.

Applications for Right to Buy sales received by social landlords before 21st November 2024 will still be eligible for the current discounts. The short period before the reduced discounts are implemented, is intended to minimise any spike in sales.

The Government is expected to launch a consultation seeking views on further reforms to the Right to Buy scheme, including amending the percentage discounts considering the reduced maximum cash discounts. This will support the Government in achieving its target to protect new stock and increase capacity to replace sold stock.

Read the full government policy paper here:  A review of the increased Right to Buy discounts introduced in 2012 - GOV.UK