The right-to-buy social housing policy has cost the government £200bn since 1980, according to a new report from Common Wealth. But at the same time low income people gained housing and stopped having to pay rent to the government. Social rent does not even contribute to home ownership and could be looked at as a tax on shelter.
The issue was that Margaret Thatcher used the policy to deplete the amount of social housing in the country because she did not replace the houses sold at a discount.
Right-to-buy: it’s the bubble that’s the problem
Common Wealth had a different conclusion, titling its report “wrong to sell”. But the thinktank does note that it’s “asset price inflation” and the “larger neoliberal transformation” that has made housing increase dramatically in price within the market landscape. It’s the artificial housing bubble that is the problem as the super rich buy up all the housing as assets to rent. And as the government fails to establish affordable or social homes.
Local authorities have sold off 1.9m council homes since 1980 at an average discount of 44% of market value. Meanwhile, there are more than 1.5m empty homes in the UK, including around 10% that are second homes. So the government could replace the majority of the 1.9m sold houses by converting vacant homes into social housing.
There has been a substantial decline in the number of social houses since 1980. For example, according to Shelter, in 2023/24 there was a net loss of 650 social rent homes. And Labour are doing little to fix the issue.
The government clarified that it will deliver 90,000 social homes this parliament (and a further 90,000 if re-elected). But there are 1.3 million households already on the waiting list for social housing, reflecting the net loss over the years.
It means that if Labour build 1.5m homes this parliament, only 6% will actually be social housing.
Homes not assets
As Common Wealth points out, an issue with the landscape behind right-to-buy is that in 1982/83 councils sold 167,000 homes. Including the discount, that was at a price of just £37,700 each in today’s money.
But in 2025, the former tenants’ houses are worth £230,000 each on average. Instead of only providing home ownership to low income people, right-to-buy has transferred an asset that makes money through artificial means. But remember, the only reason that’s the case is because of the failure of housing policy as a whole.
The government and private sector both treat houses as assets where people must work to the bone saving for decades to even have a chance of affording one. That leeches money away from the rest of the economy because it stops people spending the excessive housing costs. In other words, people’s money stagnates as they save for years to buy a house. At the same time, mortgage payments and rent hand money to big banks and landlords.
Meanwhile, home ownership provides security and the feeling that a person can spend money on perhaps independent, local and small businesses. It stops landlords and big banks receiving money for nothing through rent and mortgage payments, rewarding work over passive income.
That was supposed to be the government’s mantra. Yet they are doing sweet FA.
Featured image via the Canary
By James Wright
This post was originally published on Canary.