The Right to Buy public housing in Britain: a welfare analysis

IFS Working Paper (W16/20) by Richard Disney (The Institute for Fiscal Studies and University College London, London, UK) and Guannan Luo (College of Business, City University of Hong Kong)

Abstract

We investigate the impact on social welfare of the United Kingdom (UK) policy introduced in 1980 by which public housing tenants (council housing in UK parlance) had the right to purchase their houses at heavily discounted prices. This was known as the Right to Buy (RTB) policy.

Although this internationally-unique policy was the largest source of public privatization revenue in the UK and raised home ownership as a share of housing tenure by around 15%, the policy has been little analyzed by economists. We investigate the equilibrium housing policy of the public authority in terms of quality and quantity of publicly-provided housing both in the absence and presence of a RTB policy.

We find that RTB can improve the aggregate welfare of low-income households only if the council housing quality is sufficiently low such that middle-wealth households have no incentive to exercise RTB.

We also explore the welfare effects of various adjustments to the policy, in particular

1. reduce discounts on RTB sales;
2. loosen restrictions on resale;
3. return the proceeds from RTB sales to local authorities to construct new public properties; and
4. replace RTB with rent subsidies in cash.

JEL classification: I38; R38

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The Immigration Act and the ‘Right to Rent’: exploring governing tensions within and beyond the state (Policy Commentary)

an article by Joe Crawford, Sharon Leahy and Kim McKee (University of St Andrews, Fife, Scotland) published in People, Place and Policy Volume 10 Issue 2 (2016)

Abstract

Using Scotland as a case study, this paper will review the implications of the ‘right to rent’ section of the Immigration Act 2016 for matters of devolved legal competence, such as housing.

Outlining the main criticisms from a wide range of agencies and institutions, this paper will go on to argue that these measures cannot be understood in isolation from the wider activities of a neo-liberal government embroiled in the pursuit of border enforcement at one end, while utilising non-state actors in petty sovereign roles to enforce and reify the border on the other.

In doing so, we highlight governing tensions within and beyond the state, including between governments at the UK and Scotland level, between landlords and the state, and between landlords and their tenants. In doing so, we illuminate the ways in which the Act is augmenting the State’s role by making border agents of us all.

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