Landlords profit from right to buy

Submitted by Matthew on 13 December, 2017 - 10:37 Author: Gemma Short

Four in ten former council homes bought under the Right to Buy scheme are now owned by private landlords.

The data, obtained by industry magazine Inside Housing from 111 local authorities using a Freedom of Information request, shows how Thatcher's scheme has decimated social housing stock. In the councils surveyed, a total of 180,260 leasehold properties had been sold under the Right to Buy since 1980. Of these, 72,454 are now registered with an "away address", meaning they are not occupied by the owner.

The figure varied amongst local authorities, but was as high as 70.9% of former right-to-buy homes now out for private rent in Milton Keynes.

Rent is significantly higher in the private sector. Average social rent is £88 per week in England, while private rents are £210, a difference of £120. In London this rises to £108 for average social rent and £359 for private, a difference of £251. The irony for many local councils is that the Right to Buy scheme sees them subsidising private landlords as more housing benefit recipients are in private rentals. Inside Housing estimates that £9bn housing benefit a year is paid to private landlords.

A total of 1.5 million former council homes have now been sold under Right to Buy since the scheme's introduction.

Most have not been replaced. Labour estimates that only one in five Right to Buy homes has been replaced. In 2012 the government overhauled the Right to Buy scheme and promised a one-for-one replacement on any additional council homes bought above the average sales per year up until that point. However figures from the House of Commons Library show that an increasing gulf is emerging between homes sold and new acquisitions or building plans started.

According to the National Audit Office: "To meet the target of replacing the roughly 8,512 homes sold in 2014-15 by the end of 2017-18 would require quarterly housing starts to reach around 2,130, a fivefold increase on recent figures of approximately 420 per quarter."

Even worse, Inside Housing's data shows that only 48% of the replacements being built were at social rents. The rest slip in under the misnamed "affordable rent" , which in reality is 80% of market rate and no real replacement for social housing.

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