Buy-to-let landlords are cashing in after buying former council flats that have been bought at a huge discount under Right to Buy. The former council flats are in one of the most expensive areas of London and look set to be a goldmine for private landlords.
New figures have been released that show around 3,600 Westminster council flats that were sold under Right to Buy are now in the hands of private landlords who have protected their investment with buy-to-let insurance. The figures show that the council has sold 9,135 (40%) of its stock of 21,243 flats to tenants qualifying for the Right to Buy scheme, however, 3,603 (39%) are now owned by small and multiple private landlords. This means that in some parts of Westminster, there are now more private tenants on council estates than there are council tenants.
In Bayswater the 420 council tenants are outnumbered by 477 leaseholders, and in upmarket St John’s Wood there are 750 council tenants and 850 leaseholders. Local councillors claim that some of the ex-council flats in Westminster which are now owned by private landlords are being rented out at more than £2000 per month. This is over four times what a council tenant would be paying in a similar flat. What makes the situation even crazier is that many of these private landlords are getting their rent paid for by taxpayers, because the tenant is on housing benefit.
Councillor Paul Dimoldenberg, leader of Westminster Council’s Labour Group, said “Right-to-buy has transformed many council estates in Westminster into buy-to-let goldmines for private landlords. Rather than meeting housing need, some of Westminster’s council estates are now providing buy-to-let landlords with increasing financial returns as rents continue to escalate, often with the help of a huge government subsidy via housing benefit payments. Meanwhile, Westminster residents in overcrowded conditions have to wait even longer to get rehoused. We need a massive building programme of new homes at social rents right across London and an end to the current sell-off of more council property. Westminster’s housing stock of homes, for those on low incomes, has been almost halved over the last 30 years.”