A new report by the Common Wealth thinktank has estimated that Margaret Thatcher's right-to-buy scheme has cost UK taxpayers almost £200bn, describing it as one of the 'largest giveaways in UK history'. The policy, which allowed council tenants to buy their homes at steep discounts, has contributed to a severe shortage of social housing and exacerbated inequality, according to the study.
The report calculates the 'opportunity cost' of the 1.9 million council homes sold in England since 1980. These homes are now worth an estimated £430bn after inflation and property price rises, with £194bn representing the value given away through discounts averaging 43% on market prices. Many of these properties are now rented out, often to tenants on housing benefit, costing local authorities over £20bn a year.
Deputy Prime Minister Angela Rayner is pushing to reform right to buy, including extending the minimum tenancy period from three to 10 years before tenants can purchase their homes. The scheme, launched by Thatcher to promote a 'property-owning democracy', initially boosted home ownership but has since seen rates fall, especially among young adults, with less than a quarter of 25- to 34-year-olds now owning homes.
Chris Hayes, chief economist at Common Wealth, said the 'severe financial straits facing councils should be seen in the context of a decades-long assault on local government, in which right to buy was a central pillar'. Social housing campaigner Kwajo Tweneboa added that the policy 'gutted council housing and transferred public wealth into private hands'.
