London council buys back Right to Buy home for almost four times original cost
A London council bought a house sold under Margaret Thatcher’s controversial Right to Buy scheme for almost four times its original cost, an investigation has found.
Data obtained under freedom of information laws Big Problem It shows some former council tenants have made more than £200,000 from their homes as a result of rising property values.
According to the report, in one case Hackney Council sold a property for £95,050 in 2014, but bought it back in 2021 for £365,000.
Data from 53 councils in England shows they sold 20,836 homes under the Right to Buy scheme in the last five years, generating profits of £2.25bn.
But the same councils bought 8,590 properties in that period at a cost of £2.12bn. Analysis by Big Problem It suggests that more than half of these properties (4,414 of them) have previously been sold under Right to Buy.
The investigation found that despite more than £2bn being spent on home purchases, local authorities ended up with 12,246 fewer homes.
Under the Right to Buy, council tenants can buy their homes at a discount if they have lived there for at least three years. The plan, introduced by Thatcher when she was prime minister, has been accused by housing charities and experts of fueling the housing crisis and contributing to shrinking stocks of affordable homes.
Florence Eshalomi MP, chair of parliament’s housing select committee, said the findings were “genuinely worrying”, especially when you look at the fact that some councils across England are struggling with day-to-day finances.
He added: “A number of these councils are facing budget pressure due to the cost of temporary accommodation. If we had these homes people could be rehoused.”
A council tenant in Isleworth, west London, bought his Right to Buy home for £272,662 in 2016. Just over six years later, in 2023, Hounslow Council repurchased the house for £575,000 – losing £302,338, according to the analysis.
Another property at Ellesmere Port in Cheshire was sold for £16,000 under the scheme in 2016, only for Cheshire West and Chester Council to buy it back for £170,000 in 2024.
Nick Gallent, professor of housing and planning at University College London, said: Big Problem: “We always knew that the Right to Buy was the largest public infrastructure sale ever seen in the UK and was massively discounted.
“This study clearly shows that houses sold must be preserved, which is why local authorities are trying to buy them back at great cost to meet urgent needs.”
According to the latest government data, there were 1.33 million households on the waiting list for council housing in March 2024; This figure was the highest since 2014.
A Local Government Association spokesman said: “Local authorities are seeing the long-term benefits of recent reforms to the Right to Buy scheme to increase social housing stocks, despite a sharp increase in applications from people wanting to buy social housing.
“Local government plays a central role in solving the housing crisis facing the country and these reforms will help councils maintain and expand their existing housing stock.”
A Department for Housing, Communities and Local Government spokesman said: “There are not enough social homes due to the housing crisis we inherited, and the Right to Buy has directly contributed to this. That’s why we’re reforming the scheme to better protect the social housing stock and supporting councils to deliver new homes, including buying back properties sold under the Right to Buy.”
Major Guy Nicholson, cabinet member for housing management and regeneration for the London Borough of Hackney, said: “Like all London boroughs, Hackney faces huge demand for homes. Around 8,500 households are on the housing waiting list and rents in the private sector continue to rise to levels that many cannot afford.”
“All London council budgets are under increasing pressure, particularly from the demand and costs of adult social care, children’s services and temporary accommodation.
“Despite this pressure, Hackney Council delivered and continues to deliver one of the country’s largest building programmes, which includes new affordable council homes on a range of affordable tenancies. But the scale of demand for affordable homes means the council cannot rely solely on building new homes.
“As well as this, the council is also buying back homes sold through the Right to Buy initiative. This buyback scheme is a significant contribution to the supply and availability of council homes. However, a significant amount of money is required to do this and this money can only be raised by leveraging central government and London mayoral grants to supplement the council’s own capital resources.”
