The right to buy social housing in Britain: a welfare analysis

Richard Disney () and Guannan Luo ()
Additional contact information
Richard Disney: Institute for Fiscal Studies and University of Sussex
Guannan Luo: Institute for Fiscal Studies and City University of Hong Kong

No W15/05, IFS Working Papers from Institute for Fiscal Studies

Abstract: We investigate the impact on social welfare of the 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 percentage points, the policy has been little analyzed by economists. We analyze 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 examine the incentives to purchase using RTB for households with different wealth trajectories and differing qualities of public housing. We investigate the welfare effects of various adjustments to the policy, in particular (i) tighter restrictions on resale; (ii) reduced discounts on RTB sales; and (iii) returning the proceeds from RTB sale to local authorities to replace part of the public properties sold.

Keywords: Housing policy; Right to Buy; social welfare (search for similar items in EconPapers)
JEL-codes: I38 R38 (search for similar items in EconPapers)
Date: 2015-02-17
New Economics Papers: this item is included in nep-eur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.ifs.org.uk/uploads/publications/wps/WP201505.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (https://www.ifs.org.uk/uploads/publications/wps/WP201505.pdf [302 Found]--> https://ifs.org.uk/uploads/publications/wps/WP201505.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ifs:ifsewp:15/05

Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Access Statistics for this paper

More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().