Ex-council flats are right to a goldmine

More than 3,600 former council flats in Westminster, bought under the Right to Buy scheme, are now in the hands of private landlords, transforming many council estates into buy-to-let goldmines, the latest figures show.

Ironically, private landlords are now making huge profits by renting former council flats back to the council to house its homeless on housing benefits.

Westminster has been a champion of Right to Buy and has sold nearly half of its housing stock since the Eighties. Tenants who exercised their Right to Buy and then sold up often profited handsomely because of booming property prices in the borough, which includes some of the capital’s most expensive postcodes.

Westminster has sold more than 9,000 houses and flats and expects to sell hundreds more during the next three years following the Government’s quadrupling of the maximum discount available to qualifying tenants to £75,000.

Some of its estates now have fewer council tenants than leaseholders. At Millbank Estate there are 261 tenants and 297 leaseholders, while Churchill Gardens has 872 tenants and 879 leaseholders. In St John’s Wood there are 743 tenants and 849 leaseholders, while in Bayswater there are 427 tenants and 484 leaseholders.

“The Right to Buy has transformed many council estates into buy-to-let goldmines for private landlords, which is against the spirit of the original legislation,” says Paul Dimoldenburg, leader of the Labour Group at Westminster Council.

Properties are commonly rented out for more than £500 per week, over four times the average council flat rent. Owners, whether buy-to-let investors or former tenants, are free to rent out properties. But concern about profiteering landlords and housing benefit fraud has prompted a council and government crackdown.

Hackney Council has decided to introduce a licensing system for private landlords (the first such regulation in London), while housing minister Grant Shapps wants to make sub-letting of council homes illegal.

Southwark Council, London’s largest local authority landlord, is investigating possible fraud at 2,000 of its 39,000 properties. Earlier this year, a fraudster was sentenced to 20 months in prison after letting a council property in Peckham that he had bought under the Right to Buy using a false identity. Southwark has 19,000 people on its waiting list.

In theory, council tenants must use the property as their sole or principle home, and are not permitted to leave the property unoccupied for more than 42 days unless for specific reasons such as ill-health.

Westminster Council actively promotes home ownership in the borough. Visit homeownershipwestminster.co.uk or call 0845 437 9701. The council has links with housing charities and associations as well as private developers, and nominates people for homes at new housing schemes.

Councillor Jonathan Glanz, housing spokesman, said: “Westminster supports the government’s Right to Buy scheme as it enables those who can afford it to secure a foot on the property ladder. The revenue from each property is reinvested to provide another much needed affordable home in Westminster.”