Four out of 10 council homes sold under Margaret Thatcher’s flagship right-to-buy policy are now in the hands of private landlords, with their tenants paying more than twice the rent levels charged by local authorities.
Freedom of information (FoI) requests sent to 111 English local authorities by Inside Housing magazine reveal that 40.2% of housing stock sold by councils to then tenants are now rented out, rising to 70.9% in Milton Keynes, which it dubs the “right-to-buy-to-let capital” of England.
Seven councils – Milton Keynes, Bolsover, Brighton & Hove, Canterbury, Cheshire West and Chester, Stevenage, and Nuneaton & Bedworth – have letting levels of more than 50% among former council-owned homes.
Thatcher promised that right to buy would result in a property-owning democracy, but with so many homes now sold on to landlords, critics say the government has been left paying huge amounts of housing benefit to buy-to-let landlords charging high rents.
Precise figures on rents paid are unavailable. But Inside Housing said the average council rent in England was £88 per week, compared with £210 charged by private landlords. In London, this gap grows from £108 for council rents to £359 for private rents.
The figures will intensify the controversy over right to buy. The government has confirmed its intention to extend right to buy to more housing association tenants, with a regional pilot in the West Midlands planned for next year.
A Department for Communities and Local Government spokesman said: “More than 77,500 tenants have used right to buy to purchase their home over the last five years, helping more people own a property.
“There are restrictions on selling on a property bought under right to buy within five years, and under our reinvigorated scheme every additional home sold off must be replaced by another one, nationally.
“Councils should deliver these additional affordable homes within three years, and so far they have achieved this.”
But critics called for an end to right to buy and renewed building of social housing. Seb Klier of the campaign group Generation Rent said: “The growth of the private rented sector in former council homes has come at huge cost to the state and society, with a higher housing benefit bill, renters in much less secure homes, and a loss of housing stock for tenants and leaseholders.
“An end to right to buy will allow us to once again produce a housing stock that is genuinely affordable for most people.”
The data shows that the appetite among landlords for buying former council homes shows no sign of abating. When Inside Housing carried out a similar survey in 2015, it found that 37.6% of former council homes sold under the scheme were in the hands of landlords. It said it anticipated that by 2026 half would have been taken over by private landlords.
The true figure for the proportion of former council homes now in the hands of landlords could be even higher than the FoI data suggests, said Eamon McGoldrick, managing director of the National Federation of Almos (arm’s-length management organisations), which manage council housing on behalf of local authorities.
“Leaseholders are allowed to sublet but some of them don’t actually inform the council that they’re doing it, possibly because they think it will be an issue.
“So there will be another number on top of this figure that haven’t given the freeholder an away address. You can probably add another 5% on to the levels we know about.”
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