The housing secretary is considering abolishing [Right to Buy] for newly built council houses and cutting the discount offered to existing tenants.
The deputy prime minister is facing growing pressure from local authorities to reduce the cost of Baroness Thatcher’s flagship policy, and a consultation on proposals will be launched in October’s Budget.
More than 100 local authorities called for the scheme to be axed on new council homes in a damning report into the state of Britain’s housing stock published on Tuesday. The report, commissioned by Southwark Council, said the policy was helping to burn a £2.2bn hole in local authority accounts and exacerbating the country’s housing crisis.
Ms Rayner attended an “urgent meeting” with local authorities last month to discuss housing reforms. The Ministry of Housing and Local Government told The Telegraph: “We are working at pace to reverse the continued decline in the number of social rent homes.”
[…]
In Southwark Council’s report, local authorities said Right to Buy had created “a serious problem for the sustainability of England’s council housing”. Ms Rayner said in the summer that the Government was considering protections for new council homes.Discounts on the scheme can reach as much as £75,000 outside of London, and over £100,000 in London. The cap, which is based on how long a tenant rents a property before buying it, is limited to £136,400 in London.
[…]
In the last financial year, 10,896 homes were sold through Right to Buy and only 3,447 were replaced, official figures show – resulting in a net loss of 7,449. Since 1991, the scheme has resulted in a net loss of 24,000 social homes.This is partly because under the current system, councils can only keep a third of the receipts from each sale to build a replacement home, with the rest going to the council and government for other purposes.
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That's the gist to be honest.
RTB gives people the right after a certain amount of time, but lack of funding meant that councils weren't able to replace the stock.
The discount is up to 70% too. So while each person who can exercise RTB gets an impressive leg up into the housing market, it's contributed to even longer waiting lists for council housing.
It also creates a bit of an ethical dilemma if you are in council housing.
As if you start doing better financially, and are able to afford regular accommodation, you have an incentive to hold until you can RTB instead. (Though there are apparently now re-assessments at tenancy renewal time)
Really, the answer is way, way, way more council housing. But the money just isn't available.