London councils are spending millions to rent homes they once owned but sold at massive discounts through the right-to-buy scheme.
New data shows that 42% of council houses and flats sold under right-to-buy are rented by private tenants – with some landlords owning five or six former council properties.
The report from Labour London Assembly member Tom Copley identifies 54,000 former council homes are rented out and blames councils for making the capital’s homeless crisis worse by building too few homes to replace them.
London needs 30,972 new low-cost rented homes every year, according to the 2017 London Strategic Housing Market Assessment, but demand is outstripping supply as only 7,905 low-cost homes to rent built in the past five years, says Copley.
He explained that London councils are renting 2,333 homes that they once owned at a cost of £22.35 million a year.
“Something has gone very wrong when tens of thousands of homes built to be let at social rents for the public good are now being rented out at market rates for private profit, sometimes back to the councils that were forced to sell them,” said Copley.
“Right-to-buy is failing London and should be abolished. Home ownership is still important for many people, but it can’t come at any cost, particularly if it means families struggling to put a roof over their heads or living in poor conditions. It’s not right that cash-strapped councils are having to fork-out eye-watering amounts renting back properties they were forced to sell at a discount.
“Many councils are building new council homes again for the first time in a generation. We risk treading water or even going backwards if we continue to lose precious existing homes to right-to-buy.”
Right-to-buy was introduced in 1980. The scheme lets social housing tenants buy the homes they are renting at a discount which increases the longer they stay in the property.
In London, the discount can rise to 70% of the home’s value with the discount limited to £108,000.
