Reform would use Right to Buy receipts and higher RP debt to fund construction of 50,000 affordable homes each year

Reform UK has promised to bring back an “attractive” Right to Buy programme to part-fund its new pledge to build 50,000 affordable homes each year for a decade.

Speaking at a policy event at the Royal Institute of Chartered Surveyors today, deputy leader Richard Tice said his party’s new affordable housebuilding ambition would cost £10bn a year.

The policy would be funded through three sources: receipts from an enhanced Right to Buy programme, an increase in housing association debt levels, and a sovereign wealth fund, to be created from the reorganisation of local government pensions.

Tice pledged to “reactivate an attractive Right to Buy programme for existing tenants”, with a 30% discount for those living in a home for five years and a 40% discount for those living in their home for 10 years.

More than two million social homes have been sold through the Right to Buy policy introduced by Margaret Thatcher’s government in 1980, with an estimated 2% replaced. The policy has not been formally abolished, but the current Labour government significantly restricted eligibility, cut discount rate, and introduced exemptions for new builds.

“This is reactivating what worked really well in the 1980s,” said Tice. “The failure back then was that the Conservatives didn’t reinvest the proceeds back into building more affordable homes”.

He claimed that the funds generated could build two affordable homes for every one sold.

The second source of funding, Tice said, would come from “a modest increase in the debt levels” of housing associations.

He said the debt levels of the top 100 housing associations was “very low” at just over 20% relative to the market value of properties. 

He said a “modest increase” of around 5% could generate more than £30bn over a decade.

It’s understood that Reform would try to enact this by requiring social housing portfolio’s to be considered at market value rather than as social rent in perpetuity, which would result in lower gearing.

However, Housing Today understands there is scepticism within the sector about how much extra borrowing such a policy would stimulate. The primary constraint on borrowing for many housing associations is not the value of debt relative to housing stock, but the cost of servicing interest payments.

Registered providers’ EBITDA-MRI cash interest cover, which effectively measures how many times a providers’ operating cash can cover its interest payments, fell to 91% in 2024/25, and is not expected to return to 100% until 2028.

While a change in valuation methodology would result in lower gearing for housing associations, most would still be constrained by these interest costs and therefore less likely to take on more debt

Tice said the final third of funding would come from his previously proposed British sovereign wealth fund, which would be created by reorganising local government pension schemes which he described as “badly managed” and “underperforming”.

Throughout the policy event, Tice stressed his background as a housebuilder, alluding to his first job “digging trenches on a construction site”.

Tice worked for housing developer London and Metropolitan after graduating in 1987 and was joint chief executive officer for 14 years at The Sunley Group, the property company founded by his grandfather.

He blamed the “extra costs of net zero” for the broader downturn in housebuilding, saying regulations that were “not necessary” were “having a devastating effect on the viability of new home building”.

Tice also used the event to announce a new social housing allocations policy.

Earlier this year, party leader Nigel Farage announced that foreign nationals in social housing would be given three months to leave or be deported.

The party has now announced its intentions to re-order priority among British nationals, criticising current rules as being “based on need rather than suitability”.

Tice said the new allocation policy would prioritise British-born workers under 35, as well as former military service personnel and married couples with children will also be prioritised.

Answering a reporter’s question at the policy event, Tice clarified that British children born overseas to servicepeople would be at the front of the queue.

He acknowledged there were “technicalities around the Human Rights Act and the Equalities Act” that would need to be addressed legislatively in order to effect the party’s planned policy.

Responding to the announcement, Rachael Williamson, CIH’s director of policy, communications and external affairs said: “We should be careful not to turn frustration about the lack of affordable housing options available into a debate about setting different groups against one another. 

“Social housing is allocated within an existing legal framework designed to prioritise housing need. The fundamental problem is that there are not enough genuinely affordable homes for everyone who needs one. 

“Britain needs more social homes, not a more divisive argument about who should be pushed further down the queue. If political parties are serious about giving young people and families a better chance of a secure home, they need to set out credible plans to build the social and affordable homes that the country urgently needs.”