Nearly £50bn needed to tackle housing shortfall caused by Right to Buy, says thinktank

The thinktank’s report found that 125,000 more social homes alone would be needed just to clear the backlog of families in temporary accommodation in England – at a cost of around £15bn.

Since it was introduced in 1980 under Margaret Thatcher, the Right to Buy has seen around two million council tenants buy their homes.

However, the scheme has also led to a sharp drop in social housing stock – falling from a peak of 5.5 million in the 1970s to around 4.1 million today. 

More than 40 per cent of homes purchased under the scheme have ended up being owned by private landlords, based on data obtained under Freedom of Information requests. This in turn has led to higher rental costs for low-income families. 

The Resolution Foundation said that building more affordable homes should be a “major part” of the government’s plans. 

The government has pledged to deliver 1.5 million new homes this parliament, but has not put a figure on how many social homes it wants to see built. 

The proposed change to the Right to Buy also include changing the discount formula and increasing the number of years tenants must have lived in their home to qualify from three to 10 years.

As a result, around 500,000 fewer tenants would be currently eligible to buy their own council homes.

A spokesperson for the Ministry of Housing, Communities and Local Government (MHCLG) said: “Too many social homes have been sold off and not replaced, directly contributing to the worst housing crisis in living memory. That is why we are taking decisive action to reform the Right to Buy scheme to make it fairer, where longstanding tenants can buy their own homes but, crucially, councils can replace them.

“This is part of our commitment to deliver the biggest increase in social and affordable housebuilding in a generation, including major planning changes to support the much-needed delivery of affordable homes.”