Latest news with #CommonWealth
Daily Mirror
15 hours ago
- Business
- Daily Mirror
Right to Buy discounts have cost taxpayers £200 billion since days of Thatcher
A report from the Common Wealth think tank shows the 1.9 million council homes sold in England since 1980 are now worth £430 billion Right to Buy discounts have cost taxpayers nearly £200 billion since 1980, new research has found. A report from the Common Wealth think tank shows the 1.9 million council homes sold in England since 1980 are now worth £430 billion. Of this sum, £194 represents equity that was effectively given away through discounts that averaged 43% from 1980/81 to 2023/24. Local councils received just £51 billion for these sales. Today, one in six private tenants in England rents a former council home, paying substantially higher rents for the same homes. The report estimates council homes worth £176 billion have entered the private rental sector. Chris Hayes, Chief Economist at Common Wealth, said: 'The severe financial straits facing councils should be seen in context of a decades-long assault on local government, in which Right to Buy was a central pillar, denying councils discretion over how best to use assets that they had built. 'Now those assets are in dire shortage and councils still bear the heightened cost of seeing people through the housing crisis.' Adjusted for inflation, Right to Buy has been the second biggest privatisation in UK history, after land sellofs. Economic geographer Brett Christophers has estimated the value of land privatisation was around £400 billion in 2016 prices. By that point, the Right to Buy giveaway had already cost £147 billion in discounts - with the total value of homes sold at £326 billion. It's the only privatisation that has combined widespread discounts with this kind of scale. Kwajo Tweneboa, a social housing campaigner and author of 'Our Country in Crisis', said: 'We're in a housing emergency. Millions stuck on waiting lists. Tens of thousands living in temporary accommodation that's unfit and unsafe. 'All while homes that were once publicly owned are now profit-generating assets for private landlords. That's the legacy of Right to Buy - a policy that gutted council housing and transferred public wealth into private hands.'
The Guardian
4 days ago
- Business
- The Guardian
Thatcher's right to buy policy is celebrated but here's the cost: losses to us all of £194bn and a fractured society
The housing problem in the UK has become so pervasive that it can sometimes seem natural and eternal, the ever-present background to British life. But it's important to remember that specific political projects and policy choices brought about the housing crisis – and continue to maintain it. A new report from the thinktank Common Wealth tallies up some of the continuing costs of one of the culprits: the right to buy, Margaret Thatcher's signature social policy. It demonstrates that the right to buy has amounted to a massive giveaway of public resources, and one of the largest privatisations in British history. Focused on England, the report's figures show the enormous scale of the public assets that local government was forced to give away. Since the policy's introduction in 1980, 1.9m English council homes were sold at an average discount of 44% of market value. Common Wealth calculates that the discount resulted in councils giving up £194bn in equity. More than 40% of the homes sold under the right to buy are now privately rented. The history of the right to buy illuminates the political logic underlying it. Thatcher didn't invent the idea – councils had been able to sell the public housing they owned to their tenants on a discretionary basis since 1936. But it was the Thatcher government that made it central to its strategy and brand. The 1980 Housing Act systematised and expanded the existing procedures for selling council houses to tenants. It obliged councils to allow discounted sales and required them to offer deposit-free mortgages to facilitate these sales. Local authorities were allowed to keep half of the proceeds from right-to-buy sales but were in effect prevented from spending it on replacing lost public housing. The right to buy managed at once to satisfy a number of rightwing political constituencies. Traditional conservatives favoured it as a way to expand owner-occupation. Neoliberals saw it as an opportunity to foster the entrepreneurial spirit and push back against municipal socialism. Above all, the right to buy was intended to encapsulate the Tory ideal of a property-owning democracy, which dated from the 1920s but featured prominently in the 1979 Conservative manifesto. There's no question that many households benefited from the policy, which remains broadly popular. But uptake has been very uneven, disproportionately benefiting more affluent tenants living in more valuable locations and housing types. More serious has been the impact of the right to buy on the housing system as a whole. Its goal was to undermine public housing and lessen its role in British life. And in this, it has unfortunately been successful. The policy drove a structural shift in British housing tenure. Before the policy was enacted, social housing of all types made up 31% of overall housing tenure in England. Today it is 16%. As a result, council housing waiting lists and homelessness have surged. In addition to its impact on existing housing, the right to buy also made building new council housing less viable. As one council officer put it: 'It makes us all more cautious about growing our stock.' If councils must sell at a discount any social housing units they build, then doing so becomes a risky venture. Rules about spending right-to-buy proceeds have been tweaked, but they still restrict the construction of new public housing. One council has calculated that it would need to sell six homes through the right to buy to generate enough funding to build one new home. The policy amounts to, in the report's words, a 'decision to de facto ban new social housebuilding'. To be sure, the issue is not just the right to buy, but the whole suite of housing policies that accompanied it. This included the deregulation of housing finance, the creation of the buy-to-let mortgage market and other support for landlordism and private home ownership. Through stock transfers, estate regeneration and other mechanisms, this housing policy trajectory has been upheld by Labour governments as well as the Tories. But the right to buy set the initial direction. In addition to its quantitative impacts, the policy had long-lasting ideological and political effects. For one, it strengthened the ideology of home ownership. It equated owner-occupation with independence, ambition and success while stigmatising and denigrating households that did not own property. Just as significantly, it helped sever the link between housing and social citizenship. The British state never fully institutionalised a right to housing, but for a few decades in the 20th century, public housebuilding was a sign of successful governance for both major parties. Today, it is clear that the property-owning democracy was a mirage. Social housing and owner-occupation are on the backfoot. Private landlordism and elite multiple property ownership are expanding. Rents and house prices are rising. The result is a housing crisis, precarity and inequality. Thatcher's motto that 'there is no alternative' was never an empirical claim so much as a normative ambition. The right to buy has been an exercise in trying to make this ambition a reality in the housing sphere, by eliminating existing alternatives to the private housing market. Critics have been calling for the policy's abolition since it was introduced. The policy was already scrapped in 2016 in Scotland and 2019 in Wales. Shelter estimates that fully suspending the right to buy would save on average more than 10,000 social homes a year. If the right to buy council housing were to be eliminated, a social tenants' deposit scheme or other offsetting policies could be established to compensate tenants without undercutting social housing as a whole. If Britain's housing problem is ever going to be solved, it will require fully ending the right to buy. But that alone is insufficient. The way out of the housing impasse is by privileging occupancy over property rights, flattening the tenure hierarchy, expanding social housing and building other decommodified housing alternatives. Resolving the housing crisis depends upon reversing and replacing the changes to the British housing system and society that the right to buy helped to bring about. David Madden is associate professor of sociology and director of the Cities programme at the London School of Economics
Telegraph
6 days ago
- Business
- Telegraph
Revealed: Thatcher's Right to Buy cost taxpayers £194bn
Margaret Thatcher's Right to Buy scheme was the 'largest giveaway in UK history' and cost taxpayers almost £200bn, a new report suggests. Changes brought in by the Conservative prime minister in 1980 triggered a surge in council tenants buying their homes at a steep discounted rate. Analysis by Common Wealth, a think tank, estimates these ex-council houses would be worth £430bn today, taking inflation and the rise in property prices into account. As a result, it claims as much as £194bn of taxpayer cash was effectively given away in free equity through the discount. Researchers said the findings affirm claims by Lord Michael Heseltine that 'no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people'. Some 1.9 million council homes in England were sold at an average discount of 44pc of market value. This has contributed to the country's spiralling housing crisis – as the stock of affordable homes was depleted and not replaced, Common Wealth said. The report added: 'Right to Buy represents two big blows to council balance sheets: the discount giveaway itself, and the forgone appreciation of the assets had they not been sold.' 'Strategic policy failure' Social housing is becoming increasingly unaffordable for councils, with some town halls turning to private landlords to provide council accommodation. If the properties were sold at their market value, and this money was 'reinvested in housing equity', it could pay off all council debt nearly three times over. The sum of debt securities and loans across local governments stood at £92bn at the end of last year. The Right to Buy scheme has long divided the housing industry. Some campaigners have claimed the report shows that 'Right to Buy has been a strategic policy failure'. Rachael Williamson, of the Chartered Institute of Housing, said: 'For decades, vital social housing has been sold off without effective replacement, costing the public billions and compounding the housing crisis However the Centre for Policy Studies said the data was 'highly misleading'. A spokesman said: 'Social housing normally generates no profits at all, so its economic value to its owner – the taxpayer – is approximately zero. The so-called 'discount' was not a discount from its actual value as social housing, but a discount from the hypothetical value it would have had if it were market housing. 'Taxpayers only 'lost' something they had already given away.' It comes as Angela Rayner is planning to overhaul the Right to Buy scheme and make it harder for tenants to buy their home, despite benefitting from it herself. The Deputy Prime Minister will extend the minimum time a tenant must live in the home from three to 10 years before they can buy it at a discounted rate. In 2007, Ms Rayner used the scheme to buy her former council house in Stockport, Greater Manchester, for £79,000 after claiming a 25pc discount. Rachel Reeves also announced a cut to the maximum saving from £136,400 to £38,000 in the Budget, leading to a surge in demand from tenants racing to buy. In July, The Telegraph revealed that almost 130,000 households in taxpayer-subsidised homes earned at least £71,344 last year. It means 3.2pc of those renting from local authorities are among the country's top earners. Kevin Hollinrake, chairman of the Conservative Party, said at the time: 'With over a million households on the social housing waiting list, it's impossible to justify high earners remaining in taxpayer-subsidised homes. 'Government subsidies should be focused on those in greatest need. Social housing exists as a safety net, and resources should be targeted at the poorest to ensure the system remains fair and effective.'
The Guardian
7 days ago
- Business
- The Guardian
Right to buy in England ‘fuelled housing crisis and cost taxpayers £200bn'
Margaret Thatcher's right-to-buy scheme has cost UK taxpayers almost £200bn, according to a report into the policy's contribution to Britain's housing crisis. In its report into the sale of millions of council homes to their tenants at steep discounts since 1980, the Common Wealth thinktank said the policy had fuelled vast shortages in social housing and turbocharged inequality. Describing it as one of the 'largest giveaways in UK history', it said the sale of 1.9m council homes in England had contributed to a situation where one in six private tenants in England now rents a former local authority home. Local authority tenants have been able to buy their homes since 1936, but changes made under the first Thatcher government in 1980 triggered a boom in sales at steep discounts to market value. Calculating the 'opportunity cost' of the sales, Common Wealth said the former council homes were now worth an estimated £430bn after taking account of inflation and the surge in property prices since 1980. Of this sum, the thinktank said £194bn represented the value that was effectively given away when the homes were sold at a discount. Between the years 1980-81 and 2023-24, the discount averaged 43% on the prevailing market price. The report comes as Angela Rayner, the deputy prime minister, pushes to tackle Britain's housing crisis by making sweeping changes to right to buy, including making it harder for tenants in England to buy their council home. Under the planned changes, eligibility for the scheme will be tightened. This will include extending the minimum time a council tenant must live in their home from three to 10 years before they can buy it at a discount. Right to buy was launched by Thatcher as a pitch to older working-class voters to build a 'property-owning democracy'. Although it helped millions of families into home ownership, it also dramatically depleted Britain's affordable housing stock as the homes were not replaced. After rising for decades, home ownership rates have fallen since 2004, and have collapsed among young adults. From a peak of more than half of 25- to 34-year-olds owning their own home in 1990, less than a quarter of young adults are now property owners,leading to a boom in private renting and many choosing to live with parents. After decades of sharply rising property prices, Common Wealth said, local authorities have lost the use of housing assets that could have either been sold at higher market values or used for social housing. Chris Hayes, the thinktank's chief economist, said: 'The severe financial straits facing councils should be seen in the context of a decades-long assault on local government, in which right to buy was a central pillar, denying councils discretion over how best to use assets that they had built. 'Now those assets are in dire shortage and councils still bear the heightened cost of seeing people through the housing crisis.' Many of the properties are now rented out, often to tenants on housing benefit at a cost to local authorities of more than £20bn year, while councils have lacked funding to replace the homes sold. The leftwing thinktank, which has links to senior Labour cabinet figures, said local government has been in 'net disinvestment' in every year but one since 1988-89 – meaning it sells more assets than it builds. A report earlier this year by the Centre for Cities found that returning the number of affordable homes back to 2010 levels would cost the government £50bn. Labour has pledged a 'social rent revolution', allocating £39bn of social and affordable homes over the next 10 years, alongside slashing planning rules to support private sector housebuilding. However, critics have warned that the government could struggle to hit its target to build 1.5m new homes in total. Kwajo Tweneboa, a social housing campaigner, said right to buy had 'gutted council housing and transferred public wealth into private hands'. 'We're in a housing emergency. Millions stuck on waiting lists. Tens of thousands living in temporary accommodation that's unfit and unsafe. All while homes that were once publicly owned are now profit-generating assets for private landlords,' he said.
Yahoo
31-07-2025
- Business
- Yahoo
Flow Capital Announces a C$15.0M Investment in Common Wealth
TORONTO, ON, July 31, 2025 (GLOBE NEWSWIRE) -- Flow Capital Corp. (TSXV: FW) ('Flow Capital' or the 'Company') is pleased to announce a C$15.0 million senior secured note in Common Wealth Pension Services Inc. (dba 'Common Wealth'), a SaaS company serving the Canadian group retirement market, with a first tranche advance of C$4.0 million. Common Wealth offers a modern full-stack platform for group retirement plan administration. With a user-friendly interface and expert support, the platform empowers members to build long-term financial security, enables employers of all sizes to offer competitive retirement benefits, and equips advisors with tools to better serve clients and accelerate the growth of their group retirement practices. Flow Capital's investment will support Common Wealth in accelerating product innovation, expanding its customer base, and scaling operations, advancing the company's mission to make retirement security accessible to everyone in Canada. Growing technology companies seeking flexible, covenant-light, founder-friendly growth capital are encouraged to apply directly at About Common Wealth Common Wealth is driven by its mission to make retirement security accessible to everyone, currently serving over 1,100 employers across Canada, with especially rapid adoption among SMBs and the advisors who serve them. Common Wealth's vision is to provide its members with a 'retirement plan for life' that extends beyond the workplace, and to offer its advisor partners the best platform to power the growth of their businesses. Common Wealth's retirement technology platform has been awarded Pensions & Investments' global Innovation Award for Best Technology. For more information, please visit About Flow Capital Flow Capital Corp. is a publicly listed provider of flexible growth capital and alternative debt solutions dedicated to supporting high-growth companies. Since its inception in 2018, the company has provided financing to businesses in the US, the UK, and Canada, helping them achieve accelerated growth without the dilutive impact of equity financing or the complexities of traditional bank loans. Flow Capital focuses on revenue-generating, VC-backed, and founder-owned companies seeking growth capital to drive their continued expansion. Learn more at For further information, please contact: Flow Capital Corp. Alex BalutaChief Executive Officeralex@ 47 Colborne Street, Suite 303,Toronto, Ontario M5E 1P8 Forward-Looking Information and Statements Certain statements herein may be 'forward-looking' statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Flow or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Flow assumes no obligation, except as required by law, to update any forward-looking statements to reflect new events or circumstances.
