Tenants who bought their council homes using the controversial Right to Buy scheme racked up £6.4 billion in resale profits, an investigation has found.
The BBC has published figures showing that since 2000, 140 tenants bought and sold their homes under the policy in one month to make a profit of £3 million between them.
The scheme was introduced by Prime Minister Margaret Thatcher who said it was a way to ‘introduce a property-owning democracy’.
Since then, 2.6 million council homes have been sold under the scheme with former tenants who sold up within 10 years of buying having to offer their council the opportunity of buying back the property first.
Researchers also found that one tenant paid £8,000 for their Solihull council home and then nine days later sold it for £285,000.
Profits enjoyed by council house buyers
An interactive map has been produced by the BBC showing the profits that were enjoyed by council house buyers across Britain.
The findings have been called ‘shocking’ by the Chartered Institute of Housing (CIH).
A spokesman for the CIH said: “It’s shocking to see in black-and-white the extent of the profit margins.”
The organisation is now calling for the Right to Buy scheme to be suspended in England; the scheme was halted in Wales last January, and in Scotland, it was ended in 2016.
Researchers used data from HM Land Registry as well as the registers of Northern Ireland and Scotland and used Freedom of Information applications to put together its findings.
Right to Buy tenants are allowed to buy their council property
In England, Right to Buy tenants are allowed to buy their council property at a discount but those who then sell their home within five years of buying it have had to repay a proportion of the discount they enjoyed on a sliding scale depending on how long they retained their home. The discounts could be as high as 70% – depending on the length of the tenancy.
However, the discounts that were repaid have not been recorded.
In England and Wales, researchers found that the average length of time that a buyer retained their Right to Buy home before selling was 7.5 years.
Also, around 53,000 homeowners racked up a £5 billion profit – or £4.3bn in real terms – between 2000 and 2018, though one in 20 made a loss in real terms.
The chief executive of the housing charity Shelter, Polly Neate, said that the scheme will ‘store-up up serious trouble for the future’.
She added: “We are still building fewer homes than we sell off.”
The head of local government at accountancy firm Grant Thornton, Paul Dossett, said that Right to Buy had been a ‘disaster’ for the UK taxpayer.
He added that the policy is ‘unsustainable’ and he says councils should retain as much money from the house sales as possible.