From £9,000 to £125,000 in 67 days - Norfolk’s council house sale profits revealed
PUBLISHED: 14:01 14 March 2019 | UPDATED: 15:08 14 March 2019
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Figures have revealed how much profit former council tenants have made through selling their homes under the government’s Right to Buy scheme - in a handful of cases just weeks after the purchase.
In one case, a tenant bought their Norwich home for £9,450 in 2017, selling it 67 days later for £125,000 - making a £115,500 profit, or £1,725 a day.
The figures, which go back to 2000, have reignited the debate nationally about RtB, a government initiative where council tenants can buy their homes at a discounted rate.
Opponents say too many people have profited from the scheme, which they say leads to a significant drop in the number of council homes available.
Supporters, though, say for many it is the only option to get on the property ladder and gives tenants some financial certainty.
The vast majority of tenants buying their homes go on to spend a long time there - in Norfolk and Waveney, the average time period between purchase and sale was eight years and six months.
But the five years and nine months average time in Norwich made people in the district the 11th quickest sellers in the country.
And the highest average profit was in Norwich, £60,595, while the lowest was in Broadland, at £16,758.
But the figures did shed light on some extreme examples - the quickest sale was in south Norfolk, when one person bought their council home for £159,000 in 2007, selling it 21 days later for £184,000, making a £25,000 profit.
In north Norfolk, a tenant who bought their property for £19,800 in 2009 then sold it for £70,000 just 36 days later.
But in Broadland, someone bought their property for £200,000 in 2006 and sold it 53 days later for £141,000, making a loss of £59,000.
And in King’s Lynn, one person bought their rented property for £395,000 in 2011 and sold it for £840,000 in 2013.
Homeowners who have been public sector tenants for between three and five years receive a 35pc discount if they choose to buy their home, under the scheme.
After five years, the discount increases by 1pc each year, up to a maximum of 70pc across England - £80,900 across England and £108,000 in London boroughs.
Tenants who use their RtB must repay a portion of the discount, though, if they sell their property in the first five years, and must offer their local authority first refusal to buy it back.
The scheme has faced criticism - the Chartered Institute for Housing (CIH) said it was “shocking to see the extent of the profit margin in black and white”, and called for it to be suspended.
It was scrapped in Wales in January, and in Scotland in 2016.
In February last year, figures showed that in Norwich alone 926 council homes had been sold since 2010, and were sold for £55m less than market value because of the discounts.
Polly Neate, chief executive at charity Shelter, said: “The chronic shortage of social housing available is nothing short of a disaster given our current housing emergency. Hundreds of thousands of people are homeless and millions more are struggling in deeply insecure and expensive private renting, so replacing social homes on a like-for-like basis is critical. In just the last year, there was a 9pc increase in the number of children without a permanent home in the east of England.”
She said it was vital that not only did the country replace the sold-off social housing, but built it on a bigger scale, adding that the charity has called on the government to back its call for 3.1m new social homes over the next 20 years.
Dr Jan Sheldon, chief executive of St Martins, said: “We do very feel strongly about the lack of social housing; it can have a significant impact upon those trying to find somewhere to live, particularly people who are vulnerable. With thousands of people across the UK being homeless and many more living in unsuitable accommodation, replacing social housing is critical.
“In Norwich we are very fortunate; the city council is committed to social housing and they have an exceptional level of housing stock, so we are in a better position than many other areas.”
• What is your experience of the Right to Buy scheme? Leave your thoughts in the comments below, or email firstname.lastname@example.org