Right To Buy is a good policy when it helps council tenants become home-owners and a new house is built from profit. But that’s not happening.
Wandsworth sold 128 council homes last year and built 2 new ones.
£26.2m of property was sold for £14.7m (only £8.3m of which is available to build new homes).
The Sunday Times story “Sell us your council flat and we’ll split the profit” suggests the Right To Buy is being abused in London. “[Property developer] said councils are massively undervaluing properties, which he can buy from tenants and resell for much higher prices.”
There is certainly cause for concern in Wandsworth. Right To Buy sales more than doubled from the previous year. It is hard to believe all 128 families bought with no middle-men involved.
Even if they receive the maximum £100,000 discount, tenants still need extraordinary wealth to buy their council homes. Take this 3-bed Surrey Lane Estate council flat which is on the market for £495,000. To exercise their Right To Buy, a tenant would need a £40k deposit plus £2,000 mortgage payment each month for 25 years!
I asked the council what the average income of Right To Buy tenants was and how many buy in cash or with the help of property developers.
The council replied that it does not collect data on the income of Right To Buy purchasers. It makes no checks on whether buyers use cash or have a mortgage.
Millions of pounds of housing assets are being lost to the council each year without adequate safeguards that the right people are benefiting from Right To Buy.