Right to buy = subsidised buy to let? (January 2013)

A recent article by People, Place and Policy Online highlighted the extent to which the private rented sector is made up of ex-local authority stock transfered through Right to Buy (RTB). As rent in the private rented sector is invariably more expensive than social housing for equivalent dwellings, the article goes on to consider the additional annual cost of Housing Benefit support to this ex RTB stock. 

The authors estimate the additional cost could be well over £1 billion per year.

The Government’s plans to expand the RTB scheme will therefore simply increase these costs year on year. The article explains that this is important because RTB is being revivied on the basis that it will generate income for new housebuilding, however it seems likely that any receipts generated from new sales will fail to exceed the additional Housing Benefit costs.

The article concludes by saying that if the Government has billions of pounds to spend on housing it might make more sense to spend it on new housing supply rather than to invest it in tenure change and continuing housing shortage in key areas.

Feel free to leave your thoughts on RTB below

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