Revealed: the millions in private profit made on Welwyn Hatfield and Hertsmere’s right-to-buy homes
PUBLISHED: 09:37 21 March 2019 | UPDATED: 09:47 21 March 2019
Welwyn Hatfield and Hertsmere residents who bought their council homes through the right-to-buy scheme have made millions of pounds by reselling the former public assets, new figures can reveal.
Figures from the BBC Shared Data Unit show that since 2010, 312 Welwyn Hatfield council homes bought through the scheme have been resold at a private profit that comes to, at minimum, £13,742,247.
Meanwhile in the same time period in Hertsmere, 98 properties bought under the scheme have netted their owners at least £2,746,320 in the resale.
These figures, which have been adjusted for inflation, are likely to be much higher as many of the homes do not have sale and resale price information.
One Welwyn Hatfield home, bought in 2014, was resold within just eight months.
Another one was sold in 2010 within 10 months for £217,000, at a tidy real-terms profit of £66,000.
One home in Welwyn Hatfield, bought in 2004, was resold just four years later at a real-terms profit of £360,000.
That Welwyn Hatfield homeowner made £367 of profit per day while they owned the property.
A further 11 other Welwyn Hatfield houses formerly in public ownership have been sold on by right-to-buy owners since 2010 for over £200,000 real-terms profit each.
In Hertsmere, the biggest profit made from reselling a former council home was £317,293.
That home was resold within 27 months of being bought from the council.
In that time, the property made its owner £388 per day.
The vast majority of people reselling their former council home made a profit, however two not-so-lucky Hertsmere people actually made a loss when they resold.
One Hertsmere home was bought from the council at the standard discount for £166,000, but only made £125,000 seven years later on the open market.
Another Hertsmere home lost a similar £78,829, or an average of £38 a day, in the space of nine years.
The right to buy a council home was a flagship policy of Margaret Thatcher, introduced in 1980 as part of a drive to produce, in her words, a “property-owning democracy”.
Tenants who had been in council properties for a minimum of three years were offered a discount starting at one third of the market value, increasing to up to 50 per cent for those who had been in there 20 years.
Today, the policy has been adjusted so that public sector tenants of three to five years get a 35 per cent discount, and after five years the discount increases one per cent for each extra year of tenancy, up to a maximum of 70 per cent.
If buyers want to resell the property within the first five years, they must repay a portion of the discount to their council.
In addition, if they want to resell within 10 years, they must offer their local authority first refusal.
Critics of the scheme have said that the right-to-buy scheme reduces the availability of council houses.
Henry Pryor, housing market commentator, said: “Clearly. the policy has worked well for a lot of people but the decimation of the nation’s social housing stock leaves huge question marks.
“[...] There is no compelling argument for these policies to continue, and I would like to see them consigned to the rubbish bin as soon as possible.”
Polly Neate, CEO of housing and homelessness charity Shelter, said: “While right-to-buy has helped some people to get on the property ladder who wouldn’t otherwise have been able to, it’s stored up serious trouble for the future because we’re still building far fewer homes than we’re selling off.
“The chronic shortage of social housing available is nothing short of a disaster given our current housing emergency.”
Currently, Welwyn Hatfield Council’s housing needs register shows a wait of 16 months for one-bedroom accommodation, stretching up to four years for anyone needing a five-bedroom home.
A two-bedroom house has a waiting list of 13 months.
There is also an eight-month wait for sheltered accommodation from the council.
Kit Malthouse, the minister for housing, defended the policy.
“Under right-to-buy, the government has helped nearly two million people achieve their dream of home ownership and we are working hard to make sure that everyone in the country who wants it has a shot at getting on the housing ladder.”
The BBC Shared Data Unit is a data partnership with the local news industry.
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