Re-sold Right To Buy homes make £6.4bn in profit

The average time people kept their Right To Buy (RTB) home before selling it on was seven-and-a-half years.

In an investigation into the Right To Buy policy, the BBC’s Shared Data Unit obtained and analysed data from HM Land Registry, the Registers of Scotland and the Northern Ireland Housing Executive, finding that homeowners in Britain who bought under the scheme had made £6.4bn in collective profit from sales since 2000.

According to reports, one former council tenant bought their home under Right To Buy for £8,000 and sold it on for £285,000 nine days later – a £277,000 profit.

The Solihull buyer was among 140 in Great Britain who bought and resold within one month, making a £3m collective profit.

Since October 1980, council tenants have been able to buy their homes at a discount, which now stands at a maximum of 70% – depending on the length of the tenancy – or £80,900 across England and £108,000 in London boroughs (whichever is lower).

The report further highlights that, in England and Wales between 2000 and 2018, some 53,000 homeowners made £5bn in profit, or £4.3bn in real terms, with about one in 20 making a loss in real terms.

In Scotland, homeowners from 39,000 sales made £2.3bn in profit or £2.05bn in real terms, with the average time someone kept their RTB home before selling it on being about five years and eight months, according to the report.

Opponents of the scheme said too many people had profited from a policy that had “much bigger social ambitions”, with supporters adding that Right To Buy helped people secure their financial future.

The Chartered Institute of Housing (CIH) said it was “shocking to see the extent of the profit margin in black and white”, calling for the scheme to be suspended in England.

In January it was halted in Wales, as it was in Scotland in 2016.

In one case, the report identifies former HR manager Jane Thorp, who bought her Brighton flat leasehold under Right To Buy in 1993 for £15,000 after she had been a tenant there for seven years.

Jane said that she pays a monthly service charge to her council for repairs to her block and said she was sometimes charged “a huge bill” for major works such as new wall insulation.

She added: “I think we have five non-resident landlords [who bought ex-Right To Buy homes] in this block. They’re not rich people – they’re just looking for a bit of income for their retirement.

“I wouldn’t have been able to buy without Right To Buy. I was lucky, I still have equity. Some people are stuck there in perpetuity, because you can’t downsize from a council flat.”

Commenting on the scheme, Polly Neate, CEO of Shelter, said it had “stored up serious trouble for the future”, adding that “we’re still building far fewer homes than we’re selling off”.

Labour’s housing spokesman on the London Assembly, Tom Copley AM, said he “wouldn’t begrudge anyone taking a decision in their own financial best interests”, but RTB’s legacy was “a massive transfer of wealth from the many to the few”.

Kate Henderson, CEO of the National Housing Federation, added that her organisation was working with ministers to develop “safeguards to stop the loss of social housing” by insisting on the replacement of a new affordable home for every property sold.

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