The Government is now selling off council homes at an average price of £59,000, down from over £80,000 before they came to power, a BuzzFeed analysis has shown.
The government is selling off the country's remaining council homes at lower prices than ever before despite a soaring housing market.
Social tenants have had the 'Right to Buy' their homes at a large discount since Margaret Thatcher introduced the policy in 1980. Since coming to power the Coalition has increased the discount dramatically, with an increase to a maximum of 70% of the market price taking effect this year.
In 2010, the year the Coalition came to power, the average sale price for social homes in England was £81,695. By 2013, the last year for which data is available, the government's hike in discounts had cut the average sale price of a council home to £59,044. Revenue is likely to fall even further this year, as the 70% discount comes into force.
Meanwhile the average price of a UK house for ordinary buyers hit £250,000 in February – nearly five times as much.
It costs £141,000 to build an average council home, according to National Audit Office figures: two and a half times the amount raised by the average council house sale.
The sale price of homes under Right to Buy is nowhere near enough to cover a direct replacement, as the above graph shows. But on top of this, only 42% of money raised from a Right to Buy sales can go to fund new homes. (The Treasury takes 33%, and councils keep 25% for their general funds).
But councils or housing associations cannot use the funds from Right to Buy sales to build traditional social housing. Instead they are allowed to help fund new properties that are made available at the "affordable" rents, a new standard introduced by the current government, which can be as high as 80% of the market rate.
The fall in prices is great news for social tenants who can buy their home: they get a house at a far lower cost than everyone else and get onto the housing ladder. It's not such good news for people on housing waiting lists, who have to wait longer as the number of homes available for social rent falls away.
Adam Morton, policy leader at the National Housing Federation, which represents social landlords, told BuzzFeed that the policy was leading to the depletion of social rented homes at housing associations: “The increased discount means they receive much less money per sale, making it very difficult to replace affordable homes one for one."
Increasing the Right to Buy discount has led to a surge of applications from council tenants to buy their own home in London, where house prices are highest.
Even if these council homes are replaced, the replacements would have to be at "affordable" rent, as much as 80% of the market rents in that area. In many areas of Zone 2 that would be over £1,000 a week for a three bedroom flat.