Former council tenants have turned a huge profit by flipping homes under the scheme, it's been revealed
An investigation has found that 139 former council tenants who bought their homes through the Right to Buy scheme resold them within a month, making a quick turnaround profit of £2.8m collectively.
The BBC’s Shared Data Unit made the discovery after analysing records from the HM Land Registry, as well as the Registers of Scotland and the Northern Ireland Housing Executive.
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Altogether, sales figures show that council tenants have turned a profit of £6.4bn since 2000.
The Right to Buy scheme has been a contentious issue since it was introduced by Margaret Thatcher’s government in 1980.
Under the system, council tenants were given the right to buy the home they were living in at a reduced rate – discounted by up to 70% – depending on how long they had lived there. Since its introduction, 2.6 million council homes have been bought this way.
Supporters say the scheme offers council tenants a genuine opportunity to get on the property ladder after years of renting.
A controversial system
Critics, however, have long argued that Right to Buy depletes social housing resources, with not enough replacement homes being built. Some even allege that it gives council tenants an unfair advantage over other would-be homeowners.
Data obtained by the BBC shows that one property bought in Bury in 2017 for £1,250 sold less than a month later for £157,000, netting the owner a profit of £7,800 for each day they owned the house.
But figures also show that this process of flipping homes was far from widespread.
The average time homeowners remained in their Right to Buy homes before selling on was found to be seven and a half years in England and Wales, while in Scotland, residents stayed in their properties for an average of five years and eight months.
Calls for reforms
Despite this, in February the Chartered Institute of Housing (CIH) called for England to follow in the footsteps of Scotland, where the Right to Buy scheme was stopped in 2016, and Wales, who abandoned the policy in January this year.
Terrie Alafat, Chief Executive of the CIH, said: “We support the principle of helping tenants move into home ownership if that’s what they want, but it cannot be at the expense of other people in need.
“The government should suspend Right to Buy to stem the loss of social rented homes, remove the barriers stopping councils from replacing homes sold and look at more effective ways to help people access home ownership.”
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Photo: Yui Mok/PA Archive/PA Images