Right to Buy Overhaul Explained. What the New Reforms Mean for Social Housing

On 28 April 2026, Housing Ministers Steve Reed and Matthew Pennycook confirmed the government will bring forward significant reforms to the Right to Buy scheme, which allows eligible council tenants in England to purchase their home at a discounted price. The changes are designed to slow the rate at which council homes are sold and give local authorities more confidence to build new social housing. To understand why they matter, it helps to understand how we got here, in over forty years of Right to Buy the number of council homes sold has far outpaced the number replaced, contributing to a social housing crisis that affects millions of people across England today.

What Is Right to Buy?

Right to Buy gives eligible council tenants in England the legal right to buy their home at a discounted price. Introduced by Margaret Thatcher's government through the Housing Act 1980, the idea was that tenants who had paid rent for years should have a route into home ownership. In practice, the scheme transformed the landscape of social housing in England over the following decades, and not always in the way its architects intended.

How Did We Get to a Social Housing Crisis?

Right to Buy was popular from the start. In the 1980s and 1990s, hundreds of thousands of council homes were sold. By some estimates, more than two million council properties were sold under the scheme between its introduction and the turn of the millennium. The properties sold tended to be the most desirable ones, larger family homes, houses with gardens, homes in better maintained estates. What often remained in council ownership were the homes that were harder to sell.

The critical problem was that the homes being sold were not being replaced. Government rules at the time often prevented councils from reinvesting the proceeds of sales into building new homes. The money went elsewhere, into central government coffers or into general council budgets, rather than directly funding new social housing. The result was straightforward but devastating, the social housing stock in England was steadily shrinking.

By the 2000s, the consequences were impossible to ignore. Waiting lists grew into the hundreds of thousands nationally. Families, people fleeing domestic abuse, and individuals with long term health conditions found themselves waiting years for a home that simply was not there. The shortfall drove a surge in temporary accommodation, including bed and breakfasts and emergency placements, which costs local authorities billions of pounds a year and provides insecure, often unsuitable conditions for those placed there.

With social housing in short supply, the private rented sector absorbed the demand, and rents rose. A significant number of homes sold through Right to Buy were subsequently purchased by private landlords. In some areas, homes sold at a subsidised council discount ended up rented out at full market rates, sometimes back to the same councils that had sold them, as temporary accommodation. Public money, in effect, subsidised private profits.

The Role of Brexit in Making Replacement Harder

Even where councils and housing associations have wanted to build replacement homes, the cost of doing so has risen sharply. Before Brexit, construction materials moved freely across EU borders without import duties or significant administration. After Brexit, tariffs were applied to certain materials, import processes became more complex, and those added costs were passed down to developers and housing associations attempting to build new homes.

The numbers tell a stark story. Analysis by the cross party UK Trade and Business Commission, drawing on data from the European Commission and UK government statistics, found that the cost of construction materials in the UK rose by approximately 60% between 2015 and 2022, compared to around 35% in EU countries over the same period. D'Maris Coffman, Director of the Bartlett School of Sustainable Construction at UCL, told the Commission's evidence session that Brexit and the energy crisis were each responsible for roughly 40% of rising construction costs, with the Covid 19 pandemic accounting for approximately 20%. This was reported by Construction News in January 2023.

The numbers are significant. Analysis by the cross party UK Trade and Business Commission found that UK construction material costs rose by approximately 60% between 2015 and 2022, compared to around 35% in EU countries. D'Maris Coffman, Director of the Bartlett School of Sustainable Construction at UCL, told the Commission that Brexit and the energy crisis each accounted for roughly 40% of rising construction costs, with Covid accounting for the remaining 20%, as reported by Construction News in January 2023. Noble Francis of the Construction Products Association added that UK construction exports to the EU were still more than a third below pre-Brexit levels in late 2022, with smaller firms hit hardest by the added bureaucracy and compliance costs. Brexit is not the sole cause, the pandemic, energy prices, and broader inflation all contributed but the evidence points to it as a substantial and measurable factor making replacement social homes harder and more expensive to build.

What Does the 28 April 2026 Announcement Actually Change?

The Eligibility Period Change

The minimum time a tenant must have lived in their council home before applying to buy is being extended from three to ten years. This gives councils and housing associations a longer period of security over their stock before any sale can occur.

The Discount Reform

Under the previous system, discounts could reach 50%, 60%, or more of a property's value. The new structure is radically different:

• The discount starts at just 5% of the property value, regardless of how long the tenant has lived there at the point of eligibility.
• It increases by 1% per year, meaning a tenant who has been eligible for five years would receive a 10% discount.
• The maximum discount is 15% of the property value, or the applicable cash cap (whichever is the lower figure).

The government has already taken a significant step on cash caps, having reduced the maximum cash discount to between £16,000 and £38,000 depending on the area. Combined with the new percentage structure, this means the financial incentive to purchase under Right to Buy is considerably reduced compared to the scheme at its peak, when discounts of 50%, 60%, or more were possible.

The 35 Year New Build Exemption

Previously, a council could build a new social home only to see it sold under Right to Buy within a few years, making investment in new stock financially risky. The new 35 year exemption means any social home built after the rules come into force cannot be sold under Right to Buy for 35 years, giving councils a far longer window of security to justify that investment.

The Cost Floor Protection

The cost floor rule prevents a council home being sold at below the cost of building, maintaining, and repairing it. This protection has been extended from 15 to 30 years, meaning councils can no longer be forced to sell at a loss simply because the protection period has elapsed.

What Do Experts Say and What Comes Next?

Gavin Smart, Chief Executive of the Chartered Institute of Housing, welcomed the reforms as "a positive step towards addressing the long standing imbalance between homes sold and those replaced," and highlighted the fraud prevention and rural reviews as "crucial to ensuring Right to Buy operates fairly and sustainably."

The broader view across the housing sector is that the reforms address the right problems oversized discounts and the absence of replacement obligations but that the pace of change must be matched by significant investment in new social housing delivery if the waiting lists are to come down. These changes will not immediately create new homes for the 1.2 million households currently waiting. But they should, over time, slow the rate of stock depletion, make new investment more financially viable for councils, and remove some of the perverse incentives that have worsened the housing supply problem for decades. Together with other programmes including the Homes England social housing scheme, they represent one piece of a much larger puzzle.