Unintended Consequences: Local Housing Allowance Meets the Right to Buy
Nigel Sprigings, Duncan H. Smith, People, Place and Policy Online,Sheffield Hallam University
9th August 2012
This report concludes that the original Right to Buy policy may have increased annual Housing Benefit expenditure by £2 billion a year.
The paper looks at the amount of local housing allowance paid to those who rent private properties which were sold under the Right to Buy. It then compares the benefit paid to tenants in these properties to the cost of renting that stock through the council.
A key conclusion of the research was 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.
The paper argues that, far from generating income for new house building, 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.
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