Right to buy cost the UK economy £25bn last year, new report | news

The English economy lost £25.25bn of savings last year due to the 1.4 million social homes lost since Right to Buy was introduced in 1979, a new report by research consultancy Sonnet has found.

The figure is based on the average value brought in by a social tenant, estimated to be at least £18,051 in 2023/24.

The study, commissioned by Hyde and five other housing associations, revealed that the UK’s 4.2 million social homes contribute at least £77.7 billion a year to the economy.

These contributions come in the form of savings for the NHS, councils, police and government and economic opportunities for residents.

The new report comes after a Leveling Up, Housing and Communities Commission inquiry report found the social housing sector is under „severe financial pressure” and called for more government investment in social housing.

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Based on six participating housing associations that own a total of 220,000 public needs homes, Sonnet Impact calculated the core value of a social tenancy to be £18,051 per year. This figure increases to £23,777 per year when considering the average annual value, including the economic impact of building and maintaining homes.

A report produced by the National Housing Federation and Shelter in February this year revealed that the next government could boost the economy by £51.2bn and create savings of £12bn by building 90,000 social homes a year over 10 years.

Jim Clifford OBE, Honorary Professor at Sheffield Hallam University, worked with Sonnet Advisory & Impact to carry out an economic analysis of the benefits of social housing stock in England.

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Other housing associations involved in the research include A2Dominion, Guinness Partnership, Metropolitan Thames Valley Housing, Platform Housing Group, and Sovereign Network Group.

The report 'The value of social renting: renewing and improving the model to 2024′ shows that these six housing associations generate £5.26bn of social value per year. This includes saving the NHS more than £1bn each year and boosting economic activity by £1.8bn.

2.5 million English homes are managed by housing associations and generate at least £46.3bn for the economy.

Created by Hyde Group and Sonnet Impact in 2018, The Value of Social Leasing aims to attest to the impact of social housing and the importance of sustainable and affordable living.

Andy Hulme, chief executive of Hyde Group, said: „Safe, affordable and secure social housing provides people with a stable foundation from which to build a life, build a career and start a family.”

„Using detailed real-world data, we were able to paint a picture of life without social housing and the massive impact this has on the economy and public services,” Hulme added.

The report also allows us to “give credit to the social housing we have lost over the last four and a half decades. Failure to replace these homes costs the economy and society huge amounts every year.

Elizabeth Froude, group chief executive of Platform Housing Group, echoed this, saying, „Until now we have not been able to deliver hard and fast value to external stakeholders such as government exchequers. Good investment nationally”.

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