4 in 10 right-to-buy homes are now private rentals – and UK taxpayers are paying twice
Key Points
- Over four in ten homes sold under right-to-buy are now rented out privately
- Former council homes are re-let at two to three times their original social rent
- Housing benefit bill has nearly doubled since 2010
- Government reforming right-to-buy through the Social Housing Bill
- £39 billion Social and Affordable Homes Programme targets 60% social rent
Right-to-buy, the scheme that let millions of council tenants purchase their homes at a discount, is now producing one of its strangest legacies: the British taxpayer paying for the same home twice – once to build it, and again, every month, to rent it back.
Speaking at Lloyds Banking Group’s Social Housing Forum at Coin Street in London on Monday (6 July), Housing Secretary Steve Reed noted than four in ten homes sold under right-to-buy are now rented out privately.
The same properties, in many cases, are let to tenants at two or three times the rent charged when they were council homes. Where those tenants claim housing benefit, the state covers the difference.
“Taxpayers pay tens of billions in benefits to subsidise private landlords to rent out homes that taxpayers also paid to build,” Reed told the forum. He warned against a system where public money leaks continuously from the benefits system into private landlords’ pockets because the state sold the assets that would have contained the cost.
The cost to taxpayers
The housing benefit bill has nearly doubled since 2010 and there are 134,000 households in temporary accommodation. More than a million families sit on council housing waiting lists, queuing for a stock that right-to-buy has spent four decades draining faster than councils could replace it.
Under the current system, a council home built with public money is sold at a discount to its tenant. The tenant or, more often over time, a subsequent buyer lets the property on the private market, where rents run far above social levels.
A new tenant moves in, claims housing benefit, and the state begins paying a private landlord a premium rent on a home it originally financed. The asset is gone, but the liability remains and is growing.
Reed was careful to frame the government’s position as pro-ownership rather than anti-aspiration.
“We support home ownership, let me make that clear, but not at the expense of providing the social housing this country needs,” he said, adding that the government backs both the tenant who wants to buy and “the aspiration of the million-plus people on council waiting lists to have somewhere decent where they can afford to live.”
Build faster than you sell
The government plans to address this issue through the Social Housing Bill, which will reform right-to-buy so that homes cannot be sold off more quickly than they can be replaced. This will act as a structural brake on the drain rather than an outright abolition.
Reed described the overhaul as protecting the stock and stopping newly built homes from being sold on, closing the loop that has seen fresh public investment recycled into private portfolios.
The reform sits inside a wider programme Reed called a five-step plan for “a decade of renewal”: a generational increase in grant funding, rebuilding sector capacity, a stable regulatory regime, reinvigorated council housebuilding, and a stronger partnership with housing associations and private finance.
The headline commitment is the £39 billion Social and Affordable Homes Programme, with a target of at least 60% of homes for social rent.
Reed said council housebuilding is now at its highest level in a quarter of a century, and that starts on homes for social rent through Homes England and the Greater London Authority have doubled under this government.
A £2 billion downpayment announced in March 2025 is already moving schemes from bid to build – including a Joseph Rowntree-led development in York delivering 117 homes, 60% of them for social rent.
Alongside the grant, the government is loosening the sector’s borrowing constraints.
Reed announced £2.5 billion of low-interest loans for private registered providers, on top of a 10-year rent settlement allowing landlords to raise rents by CPI+1% annually, with rent convergence permitting additional increases for properties below formula.
Housing associations will also get equal access to building remediation funding, over £1 billion between 2026-27 and 2029-30, while councils keep the Public Works Loan Board’s preferential borrowing rate for housebuilding until March 2027.
The Small Sites Aggregator, a financing model developed with Lloyds and other partners to unlock small parcels of land for social rent, will be rolled out nationally following its pilot, with an ambition of 10,000 homes a year by the end of the Parliament.
