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Government considers giving more tenants the Right to Buy - how could this affect landlords?

A recent newspaper report outlined supposed plans by the government to extend Right to Buy – the controversial policy first introduced by Margaret Thatcher in the 1980s – to housing association tenants, with a former minister even going as far as to say it should be extended further to private tenants as well.

This extension would mean that Right to Buy would not only include council tenants in England but also housing association renters, and a former Housing Secretary has now stated that he also wants all tenants, including the private sector, to be involved.

Right to Buy was initially introduced by Margaret Thatcher four decades ago for council tenants. But now, according to reports by the Daily Telegraph, Prime Minister Boris Johnson want to extend the policy to the 2.5 million households who rent properties from housing associations in England. 

What’s more, previous Housing Secretary Robert Jenrick – now out of government, but still considered a staunch ally of Johnson – has said that he would like to see the idea extended across the rental sector to private tenants. 

The idea of a Right to Buy for private tenants was originally mooted by Labour’s former shadow chancellor John McDonnell at the last election, back in 2019, but received widespread criticism. 

He told the Financial Times that he would like to see private tenants receiving a discount, while he also stated to the BBC that his party would ensure there was a “fair price assessment” of any buy-to-let property which a tenant may desire to purchase.

“I don’t expect anyone to lose out,” McDonnell insisted at the time. 

Would Right to Buy for private tenants really work?

While the original Right to Buy policy helped owner-occupation rise from 55% in 1979 to 72% in 2004 (albeit owner occupation has generally dipped since then), it also resulted in a sharp decline in social housing availability, with some 1.6 million council homes sold off under Right to Buy and never replaced. In recent years, Scotland and Wales have decided to entirely scrap Right to Buy, but England has persisted with it.

One fear of such a policy would be a sell-off of privately rented homes that are never replaced, leaving the country short of rental homes in the way it’s long been short of social housing. Equally, it’s not clear if private landlords would have a clear say on whether they would need to sell their home or not, if a private tenant asked to purchase it.

There are a number of grey areas that would need to be cleared up, and critics have hailed it as unworkable. It also seems highly unlikely to ever happen – and certainly not anytime soon – although the backing of the idea from a high-profile former Cabinet minister, and ally of the PM, might raise a few eyebrows among the landlord community.  

Although Labour have flirted with a similar idea before, they are also long-term critics of the impact of Right to Buy overall, so any future Labour government – if they were to come to power – might be more inclined to scrap Right to Buy rather than extend it. 

For now, it’s something that landlords can rest easy about, but as the Conservatives talk about their latest plans to revive their former leader’s flagship policy, it’s also something that landlords may want to keep one eye on, in case further developments with Right to Buy occur.

Here at Holland Properties, we have been an established letting agent since 1999 and can assist you with the sale of your home or help to manage your tenancies. We operate across London, with our head office based in Docklands.

For further guidance on any part of the lettings process, please contact us today. You can also request a free and instant online valuation to see how much rent you could be charging in the current marketplace.