Right to Buy overhaul aims to protect council homes from the sell-off

Right to Buy, the policy that transferred more than two million council homes into private ownership since 1980, is being fundamentally rebuilt. As the Social Housing Bill cleared its second reading in the Lords, the government's reforms took shape: tenants will need ten years' tenancy before qualifying (up from three), discounts will start at 5% and rise to a maximum of just 15%, and newly built social homes will be shielded from sale altogether for 35 years.

The package, set out on GOV.UK, also extends cost-floor protection — which stops homes selling below what was recently spent on them — from 15 to 30 years, and lets councils keep 100% of sale receipts to fund replacement homes.

At a glance

• Eligibility period raised from 3 to 10 years
• Discounts start at 5% and rise to a maximum of 15%
• New social homes exempt from sale for 35 years
• Cost floor protection extended from 15 to 30 years
• Councils keep 100% of sale receipts for replacement homes

From flagship to leak

Right to Buy was the defining housing policy of the Thatcher era and remains popular with the tenants it enriched. But its arithmetic has been unforgiving for councils: homes sold at deep discounts were rarely replaced, and a substantial share of sold council homes ended up in the private rented sector — sometimes let back to councils at market rents to house homeless families.

With record temporary-accommodation bills and waiting lists measured in years, ministers concluded that every discounted sale now deepens a shortage the state pays for elsewhere. The reform recasts the scheme from an engine of ownership into a managed exit valve.

What each change does

The ten-year eligibility period rewards long-standing tenants while ending quick-qualification purchases. The 5-15% discount range removes most of the windfall that made buying irresistible — and made each sale a large capital loss to the council.

The 35-year exemption for new builds is the structural fix: councils have been reluctant to build homes that could be sold at a discount within years of completion. A 35-year shield makes new council housing an investable asset again, which is precisely the behaviour the government wants to unlock.

Full receipts, real replacement

For decades councils remitted a share of Right to Buy receipts to the Treasury and faced restrictions on combining the remainder with other funding — rules that made one-for-one replacement arithmetically impossible. Permanent retention of 100% of receipts, dedicated to replacement homes, closes that loop.

Replacement still is not automatic: build costs, land and borrowing capacity all constrain delivery. But the financial excuse has been removed, and future scrutiny of council building programmes will proceed on that basis.

The argument on the other side

Critics of the reform call it the effective end of a working-class route to ownership, pointing out that a 15% maximum discount on today's prices leaves most social tenants unable to buy. The government's answer is blunt: the subsidy was being paid by the families stuck on waiting lists.

The Lords stages will test the balance — amendments are expected on discount levels, exemption periods and protections for tenants mid-way through qualification under the old rules.

What happens next

The Bill continues through the Lords, with implementation of the new regime expected once it receives royal assent and commencement orders follow.

The long-term measure of success is simple to state: whether the social housing stock stops shrinking. Sales data, replacement completions and waiting-list numbers over the rest of the decade will show whether the overhaul achieved its purpose — or merely slowed the leak.