Since its introduction in the early 1980s, the government’s Right to Buy scheme has helped millions of qualifying council tenants get on the property ladder.
Criticised in its early stages by some as a niche concept, the popularity of Right to Buy to this day paints a picture of a quite remarkable success story.
An Extraordinary Property Purchase Platform
For almost four decades, Right to Buy has been single-handedly carving out an entirely new area of the property sector and has helped countless council tenants purchase their properties at discounted rates. Latterly however Right to Buy has also played directly into the hands of enterprising landlords, some of whom have amassed multimillion-pound portfolios of properties in key locations, generating massive monthly revenues from rental income.
According to official government figures, Right to Buy helped more than 1 million property occupants get on the property ladder in 2008 alone. In addition, the total value of the Right to Buy mortgage market for 2013 topped £20 billion.
While the scheme has been criticised for the ease with which it can be ‘exploited’ by ‘profiteering’ landlords, it is nonetheless evidence that it has transformed the lives of millions of households. The overwhelming majority of which may have otherwise never have set foot on the property ladder.
Growing Demand for Affordable Housing
What has also become evident over the past couple of years is the way in which the government is not likely to come close to meeting its affordable home building targets for the foreseeable future. According to the most recent estimates, at least 1 million new affordable rental properties need to be built by 2023, simply to meet current demand. In the meantime, government has also promised to become more ‘tenant focused’ in its approach i.e. to take aim at unscrupulous landlords and help more renters find affordable housing.
Still, the fact that property prices in general across the UK have been rising over recent years makes the affordable housing issue even more challenging. Incentives for developers and construction companies willing to work on affordable housing projects have helped, but the appeal of capitalising on skyrocketing property prices is evident and understandable.
A Success Story Set to Continue
2020 will go down in history as one of the most turbulent years for the housing market in living memory. For much of the year, buyers and sellers alike have been reluctant to make important decisions regarding property investments, relocations and sales.
When the real estate sector returns to strength as predicted in 2021, interest in Right to Buy property purchases is expected to spike once again. A wave of pent-up demand is likely to be released on the sector, coupled with the desire to get on the property ladder at an affordable price.