36% of all Right to Buy properties in London now rented out

36% of all Right to Buy properties in London now rented out

New research has revealed that at least 36% of homes (52,000 properties) sold through Right to Buy in London are now let by private landlords.

The information was compiled by Labour London Assembly member Tom Copley and was released yesterday in a report entitled “From Right to Buy to Buy to Let”. 

The report highlights the financial cost to taxpayers and local authorities of Right to Buy, including increased welfare spending due to the higher Housing Benefit payments being paid to tenants in ex-council homes that are now charged at market rates. In some London boroughs, average Housing Benefit claims are as much as £100 a week – £5,200 a year – higher for private sector tenants than for council tenants.

The report also highlights that local authorities are now frequently forced to rent former homes back at higher market rates in order to discharge their statutory homelessness duties.

Copley is calling for urgent action to reform Right to Buy to alleviate what he calls “some of the worst excesses caused by the policy” in its current form.

The report’s recommendations include:
• Mandatory covenants on all Right to Buy properties so they cannot be let through the private rented sector.
• The current system of discounts should be abolished.
• A new system should be introduced whereby local authorities retain an equity stake in any property sold.
• Local authorities should have a ‘right not to sell’ if it is not in the community interest to do so or if they believe it would harm their housing operations.
• Replacement homes built with Right to Buy receipts should mirror the rent, size and tenure specifications of the home sold

Copley said: “Today’s report shows for the first time that Right to Buy, a policy ostensibly about helping aspiring home owners, has led to tens-of-thousands of London’s former council homes being rented out by private landlords. This has helped to fuel the increase in the housing benefit bill, heaped more pressure on local authority waiting lists and led to more Londoners being forced into the under-regulated private rented sector.

“This shows that Right to Buy currently represents incredibly poor value for money to taxpayers. Not only did they pay to build the home in the first place, they then subsidised the considerable discounts offered to tenants and then missed out on the rental income that would have covered the build costs. Now, we have the indignity of London boroughs renting back their former council homes at higher market rent levels, once again costing taxpayers through the nose.

“This is nothing short of Whitehall-sanctioned robbery of the taxpayer. Right to Buy has played a central role in causing and exacerbating the current housing crisis. Future governments must recognise that the right of a council tenant to buy their home at a discount, subsidised by other taxpayers, cannot be at the expense of the right of the vast majority of people to have a decent, affordable home to live in.”