Quote Originally Posted by pipster View Post
The flip side to that is - your Dad could have bought and the money that went to the council could have been used to build another flat somewhere else. Building costs havent gone up as much as the property cost - so they could have even been able to build 2 flats.
What a load of ignorant cobblers!

Until the introduction of the Self Financing Housing Revenue Account in 2012 the government's housing subsidy rules effectively prevented any Council from using Right To Buy receipts to build replacement council housing.

Since then it has been possible - but still a proportion of the receipts had to be used to pay off historic debt.

In March last year the government made a big announcement that 100% of Right To Buy receipts could be used for Council new build - but didn't lift the cap that only 40% of development costs could be funded that way. Most Councils that were trying to build new homes were already at the 40% limit so the announcement made no practical difference.

The key fact remains what it has been since Thatcher massively expanded Right To Buy in 1980 - the capital receipt from sales is a fraction of the value of the property because of the discount. New build costs have always outstripped values even if they weren't discounted for Right To Buy sales.

The Councils that owned the Right To Buy property usually funded them with a 60 year loan from the Public Works Loan Board (finally abolished by the government in 2020 and absorbed into HM Treasury). Councils still had to carry on paying off the historic debt when their rental income stream had been stopped by the sale. The capital receipt - before 2012 - went towards that debt but very often - depending on values and age of the property - there remained a debt for other tenants to pay via their rents!

Angela Raynor does not come out of this well. Eric C's dad does.