Introduced by the Thatcher government in 1980, Right to Buy resulted in more than 2.5 million council houses being sold at discounted rates.
While some Labor-controlled councils opposed, the Tories argued that the plan was necessary to increase home ownership and reward aspirations.
The sale price of a social housing was based on its market value, discounted initially at 33% to 50% (up to 70% for social rental housing), which reflects the rents paid by tenants and also encourages take-up.
The maximum discount was increased to 60% in 1984 and to 70% in 1986, but in 1988 the average discount actually given was 44%.
About 6,000,000 people were affected, about one in three of whom actually bought their property.
Michael Heseltine, then housing minister, stated that “no legislation has allowed the transfer of so much capital from the state to the people.”
Justifying the policy, he said: “There is a deep-rooted desire for home ownership in this country. The government believes that this spirit should be promoted.
It reflects the wishes of the people, ensures the wide distribution of wealth in society, stimulates a personal desire to improve and modernize one’s home, enables parents to build wealth for their children and stimulates the attitude of independence and self-reliance are the foundation of a free society.’
However, many on the left have rejected the program, blaming it for slashing the national stockpile of council properties and extending waiting lists.
When Labor returned to power in the 1997 general election, it reduced the discount available to tenants in local authorities, which put serious pressure on their housing stock, including almost all of London.
However, Tony Blair’s government has never really tried to abolish Right to Buy – perhaps wary of the massive backlash that could result.