Revealed: North London’s billion-pound sell-off of right to buy properties
- Credit: Archant
More than five thousand ex-council homes bought by social tenants under Right to Buy in Camden, Barnet, Haringey and Westminster have been sold on since 2000, funnelling more than £1.3billion into private pockets.
Since the Land Registry began compiling data at the turn of the millennium, some 5,053 properties in the four boroughs have been bought and re-sold.
Many changed hands for more than 10 times what they were bought for under the controversial policy, which since 1982 has allowed long-standing tenants to buy their homes from the local authority.
In Camden, one council tenant sold their home just a day after purchase, and in Westminster, a former council house was sold for £1.9million.
Across the boroughs served by the Ham&High series, the sale of ex-council homes earned owners £1.37bn, accounting alone for almost half the £3.1bn in London, and almost a quarter of the £6.4bn across the UK.
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Cllr Emina Ibrahim, Haringey’s deputy leader and lead member for housing, said: “Right to Buy has already been abandoned in Scotland and Wales.
“England is falling behind and letting people down who desperately need a home.
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“Here in London and Haringey it has had a major impact on council housing stock at a time when it is needed more than ever. In Haringey we have around 10,000 people on the waiting list and this is unacceptable.
“The restrictions that government places on local authorities when it comes to reinvesting the receipts are making things even worse and must be addressed immediately.”
Right to Buy property owners who re-sold homes in north London made an average profit of £127,105 each, or £73 for every day a property was held onto.
But in some cases owners made hundreds of thousands of pounds more.
Sixty-four properties were snapped up for less than £20,000 through Right to Buy and have since been re-sold for a combined £10.3m.
The 10 properties purchased under the scheme at the lowest cost were all in Haringey.
According to Land Registry data, one council home was bought for £8,700 in September 2000 and re-sold for £177,500, more than 20 times its original price, in September 2017.
House prices have soared in London and ex-council homes bought under Right to Buy are no exception, with many sold on for 10 times their original value or more.
In Westminster, two properties bought for £95,000 and £250,000 were sold more than a decade later for a respective £1.25m and £1.8m.
Meanwhile, according to government statistics, there were 13,279 households on the waiting list for social housing in the four boroughs at the end of 2017/18.
Councils have no choice in whether or not to sell a council house provided the applicant meets certain criteria. To make matters worse, they are hamstrung by arcane rules governing how they can use the receipts from Right to Buy sales.
Officially, they can only use Right to Buy cash to pay for up to 30 per cent of the cost of building social homes. Town halls are also prevented from combining the money with grant funding, meaning the other 70 per cent of the cost of any development must be found without the help of the government or mayor of London.
What’s more, if councils cannot find find a way to use the receipts within these restrictions inside of three years, they must surrender cash accrued through Right to Buy to the government.
Camden’s housing chief Cllr Meric Apak said: “The reduction in council housing stock comes primarily from Right to Buy disposals. If the council continues to be forced to sell property as part of the policy, we could see many more council homes lost in future years.
“We would like to see the use of Right to Buy receipts included in the wider discussion of how to fund new house building.
“We also actively encourage the government to reconsider and relax the rules for the use of receipts we retain in order to maximise our, and other councils’, ability to build new replacement homes.”
A spokesperson for Barnet added: “We understand the impact it has when homeowners sell properties purchased through Right to Buy.
“While there are limitations on what local authorities can do to prevent this, there are safeguards in place to discourage people from exploiting the scheme.
“This includes having to repay all or part of the discount if the property is sold on within five years.”
Across the UK, Right to Buy homes re-sold since 2000 have made private individuals a collective £6.4bn profit, while more than a million people are on waiting lists for social housing.
According to the latest government figures, fewer than a third of homes bought under Right to Buy in England since 2012 have been replaced.
In a statement, the Chartered Institute of Housing said the policy had effectively been “Britain’s biggest privatisation”.
A spokesperson said: “We think the time is right to suspend [the policy] to stem the loss of homes for social rent, which are often the only option for people on lower incomes.” The government is instead working on a new version of the policy that would see it apply to more people.
Housing minister Kit Malthouse MP said: “Under Right to Buy, the government has helped nearly two million people achieve their dream of home ownership and we are working hard to make sure that everyone in the country who wants it has a shot at getting on the housing ladder.”