BRITAIN’S right-to-buy scheme was once hailed as the ‘social revolution’ which finally gave struggling families the life-changing chance to own their own home.
But now almost four decades since its introduction, the scheme – which allowed millions to buy their council houses at heavily-cut prices – has today been labelled as the root cause of the nation’s ‘social housing crisis’.
Since its inception, more than 2.6 million former council tenants in Britain have bought homes under the policy, according to The Chartered Institute of Housing.
However, a new study by the BBC has today shown how local authorities have been left in the lurch as a government pledge to replace sold council housing on a one-for-one basis has ‘fallen far short’.
Damning figures show that less than a third of homes sold under the scheme since 2012 have been replaced.
The revelation comes as Portsmouth continues to be gripped by a homes crisis with hundreds of families stuck in limbo on housing waiting lists.
In the past five years alone, Portsmouth City Council has sold 397 of its own stock – and about 16,500 properties since the right to buy scheme was introduced, the authority’s leader Councillor Vernon-Jackson has said.
‘The scheme has been brilliant for those families who were able to buy their own homes,’ said the Lib Dem leader. ‘But it’s been absolutely devastating for the next generation.’
The study has shown councils have been left out of pocket as ex-tenants reaped the profits of their new homes.
In Portsmouth, the average ex-tenant kept their homes for 2,428 days – about six-and-a-half years – before selling up. In that time, they made a profit of £57,056, or £30 a day.
Fareham homeowners raked in profits, on average, of £70,780, with people staying put for 3,156 days (8.6 years) before selling.
Havant homeowners notched up £55,439 in profit while those in Gosport achieved £48,306.
Portsmouth City Council said the right-to-buy programme had led a reduction in its housing stock.
A council spokeswoman added: ‘We have struggled to replace council properties at the rate that we have sold it – which in turn has put pressure on affordable homes in the city.’
Paul Dossett, head of local government at financial services firm Grant Thornton UK LLP, agreed and said Portsmouth was not alone in this problem.
The housing market expert said: ‘The right-to-buy scheme has been a disaster for the UK taxpayer.
‘Not only have they ended up getting less value for taxpayer-funded assets, the subsequent shortage of social housing has resulted in a hike in rent prices which, when the tenant is a recipient of housing benefit, is also funded by the taxpayer.
‘Councils have been forced to buy back homes at a significantly-inflated price to try and meet demand - a financial disaster for councils who are already struggling to remain financially sustainable.’
In 1980, when the scheme was introduced, tenants who had lived in their home for up to three years were offered a 33 per cent discount on the market value of their council home, increasing in stages up to 50 per cent for a tenancy of 20 years.
Today, homeowners receive a 35 per cent discount if they have been a public sector tenant for between three and five years. After five years, the discount increases one per cent for each extra year of tenancy, up to a maximum of 70 per cent.
The BBC’s research showed there were 9,650 sales between July 1999 and March 2018. The total profit made on those homes sales in the south east was £347m or £287m in real terms.
Right-to-buy homes were kept for an average of 2,665 days. The longest time someone kept their ex-council home before selling was 12,457 days (34 years) in Fareham. It was bought in November 1982 and sold in December 2016 for £134,000.
Kit Malthouse, housing minister, said the property project had helped millions of people take their first steps onto the housing ladder.
He said: ‘Under right to buy, the government has helped nearly two million people achieve their dream of home ownership and we are working hard to make sure that everyone in the country who wants it has a shot at getting on the housing ladder.
‘Tenants who use right to buy must repay some of their discount back to their council if they sell the property within the first five years, and must offer their local authority the opportunity to buy it back.’