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Unintended consequences: Local Housing Allowance meets the Right to Buy

Summary

Recent rapid expansion of the Private Rented Sector (PRS) is recognised but the extensive involvement of ex local authority stock in this new PRS is not. This paper uses existing literature to outline the commodification processes through which Right to Buy (RTB) housing enters the PRS. Other published research is used to estimate a likely range of council to PRS tenure change over 30 years of RTB in the UK. Then using detailed data matching, we present one local authority example at individual dwelling level across the whole stock to establish the true scale of this transfer from council housing to private rental. Finally, to stimulate debate about the revenue cost of this switch of rental tenures we speculate on the additional annual cost of Housing Benefit support to this ex RTB stock given that the PRS is invariably more expensive than council renting for equivalent dwellings. This may well be over £1bn per year. We conclude that UK government’s plans to expand the RTB scheme will simply increase revenue costs year on year for no discernable social or housing supply benefit.

By Duncan Smith and Nigel Sprigings

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