Over a third of council homes sold through Right to Buy in London are now owned by private landlords, according to figures in a new report.
The From Right to Buy to Buy to Let report, published by Tom Copley London Assembly Labour housing spokesperson, highlights the financial cost of the Right to Buy scheme. It found that some councils are paying higher Housing Benefits payments to tenants in ex-council homes as they are being rented out at market rates.
The report also found that some local authorities are renting former homes back at higher market rates in order to meet their statutory homelessness duties.
Mr 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.’
The figures in the report show that 52,000 properties sold though Right to Buy in London are now let by private landlords.
Mr Copley is calling for ‘urgent’ reform to the policy including mandatory covenants so properties can not be let through the private rented sector. The report also says the current system of discounts should be abolished and local authorities should retain an equity stake in any property sold.
In reponse to the report, GLA Conservatives housing spokesman, Andrew Boff, said: 'Right to Buy has been enormously beneficial to millions of council tenants over the past thirty years. The recommendations in this report would effectively dismantle Right to Buy, because you cannot meaningfully buy or own something with so many restrictions and clauses on what you can do with it.
'By the very figures contained in this report, almost two thirds of Right to Buy properties are still owner occupied, therefore any measures that damage this successful scheme will mostly hit people who work hard and aspire to own their own home.'