Right to buy could have raised benefit bill by £2bn
The original right to buy policy may have increased annual housing benefit expenditure by £2 billion a year, according to a report by an online journal.
A report published by People, Place & Policy Online at Sheffield Hallam University, looks at the impact of the right to buy policy which allows council tenants to buy their homes for a discount.
The research, entitled Unintended Consequences: Local Housing Allowance meets the right to buy, looks at the amount of local housing allowance paid to those who rent private properties which were sold under the right to buy. It compares the benefit paid to tenants in these properties to the cost of renting that stock through the council.
The research found that, depending on different assumptions used, the additional increase to the taxpayer through higher housing benefit payments is between £500 million and £2 billion per year.
It said: ‘That final figure of a possible £2 billion a year [of] additional expenditure significantly exceeds the income generated through right to buy capital receipts in any single year of the past decade.
‘Far from generating income for new housebuilding, extending the right to buy may simply increase the annual burden of rent support on the treasury, with a net loss overall, every year, for the foreseeable future.’