Right to Buy: from £9,450 to £125,000 in 67 days

[MattW]

Or: How to make £1,700 a day.

Norfolk/Suffolk RTB council house sale profits

Quote

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.

Even after a big 'early resale fee' to the council I wonder if this ex-tenant sold it to a 'professional' landlord (unprofessional more like) who then rented out the rooms? How is this allowed to carry on?

[Captain Kirk]

28 minutes ago, MattW said:

Or: How to make £1,700 a day.

Norfolk/Suffolk RTB council house sale profits

Even after a big 'early resale fee' to the council I wonder if this ex-tenant sold it to a 'professional' landlord (unprofessional more like) who then rented out the rooms? How is this allowed to carry on?

Apathy? Taxpayers are so used to being shafted they've given up caring.

My question is, given this is a right, how do I get mine; or are you telling me my rights are being denied?

 

[Speed1987]

Often many of these people have been council tenants for years, some have practically bought the house two times over in rent. Especially those who have been there 20 years of more.

I do however agree, that Millennials have it much tougher, little or no access to social housing, unlike the boomer,  plenty of access and plenty of cheap housing. 

Rtb needs to come to an end for new council tenants, or atleast for a tenant with only a 5 year history.

The truth is the government doesn't want any council housing, Perry bar, Birmingham will see 1400 homes built for the Common wealth games, by the council and only 58 will be used as council homes, rest will be sold. Now that just shows how this government is operating.

My prediction, next 5-10 years, high monetary inflation to pay off millennials mortgage debt. Once millennials gain power in goverment expect loads of debt eroding policies.

[Houdini]

2 minutes ago, Speed1987 said:

Often many of these people have been council tenants for years, some have practically bought the house two times over in rent. Especially those who have been there 20 years of more.

I do however agree, that Millennials have it much tougher, little or no access to social housing, unlike the boomer,  plenty of access and plenty of cheap housing. 

Rtb needs to come to an end for new council tenants, or atleast for a tenant with only a 5 year history.

The truth is the government doesn't want any council housing, Perry bar, Birmingham will see 1400 homes built for the Common wealth games, by the council and only 58 will be used as council homes, rest will be sold. Now that just shows how this government is operating.

My prediction, next 5-10 years, high monetary inflation to pay off millennials mortgage debt. Once millennials gain power in goverment expect loads of debt eroding policies.

They've been trying to force inflation for 10 years - it hasn't worked yet.

[24gray24]

This is baloney. Pure baloney. 

If you buy a council house and sell it immediately have to give the discount back to the council. 

So they owe the council £100k. 

Plus the discount doesn't add up; it's not 90%. 

[scottbeard]

I would support Right to Buy if the tenants were offered the house at full market value.

Otherwise it's just handing over public assets to private individuals, which is great for those individuals but terrible for the rest of us, especially those on the council house waiting list.

The argument "for many it is the only option to get on the property ladder" just doesn't wash - it only helps them onto "the ladder" at the expense of others, such as many people on this website.

[Dorkins]

13 hours ago, Speed1987 said:

My prediction, next 5-10 years, high monetary inflation to pay off millennials mortgage debt.

The only thing that shrinks mortgages is wage inflation. No sign of that in the system.

[Monkey]

48 minutes ago, Dorkins said:

The only thing that shrinks mortgages is wage inflation. No sign of that in the system.

Debt forgiveness, writting off HtB loans, compensation for IO, Self Cert, high LTV miss selling..... plenty of options there

[Captain Kirk]

14 hours ago, Speed1987 said:

My prediction, next 5-10 years, high monetary inflation to pay off millennials mortgage debt. Once millennials gain power in goverment expect loads of debt eroding policies.

Japan has been trying that since the late 80s. Demographics seems to be the key driver of inflation. Lots of young people with ambition and opportunities, earning, spending, buying houses, starting families, etc. Families consume a lot, and young adults sacrifice price for convenience when they are busy and have the money to spend.

[iamnumerate]

14 hours ago, 24gray24 said:

This is baloney. Pure baloney. 

If you buy a council house and sell it immediately have to give the discount back to the council. 

So they owe the council £100k. 

Plus the discount doesn't add up; it's not 90%. 

Perhaps the council didn't bother to ask for it.

[Dorkins]

3 hours ago, Monkey said:

Debt forgiveness, writting off HtB loans, compensation for IO, Self Cert, high LTV miss selling..... plenty of options there

Sure, the government could write off all mortgages and send every homeowner a cheque for £1m.

[Monkey]

2 hours ago, Dorkins said:

Sure, the government could write off all mortgages and send every homeowner a cheque for £1m.

Not to that extreme, but they have invented policies that have kept people in properties they cant afford, or able to buy at the forever higher price, they will no doubt invent more.

Or claim the previous governments policies were not right and have compensation scheme for it, or forgiveness for the outstanding debt (SMI, HtB etc). 

If a bank is paying out (IO miss selling) like PPI, they will get more "QE" or FLS to keep the plates spinning. 

Not everyone will be a recipient, but enough to be a vote winner/keep the plates spinning

[Dorkins]

18 minutes ago, Monkey said:

Not to that extreme, but they have invented policies that have kept people in properties they cant afford, or able to buy at the forever higher price, they will no doubt invent more.

Or claim the previous governments policies were not right and have compensation scheme for it, or forgiveness for the outstanding debt (SMI, HtB etc). 

If a bank is paying out (IO miss selling) like PPI, they will get more "QE" or FLS to keep the plates spinning. 

Not everyone will be a recipient, but enough to be a vote winner/keep the plates spinning

If you genuinely believe that future governments will just chuck money at people who have got themselves into a heavily indebted pickle then the rational course of action would be for you to go out and pile on the debt like there's no tomorrow so that you can get your free money. Have you actually done that? If you haven't then it means you don't really believe this scenario will happen.

Edited March 15, 2019 by Dorkins

[EssKay]

21 hours ago, Speed1987 said:

Often many of these people have been council tenants for years, some have practically bought the house two times over in rent. Especially those who have been there 20 years of more.

Sorry - but that’s complete rubbish.

The truth is the hypothetical council tenant in your scenario will have enjoyed massively subsidised housing costs for 20 years - during which time they will have had no realistic prospect of being able to afford the mortgage on a “normal” home of equivalent size (or probably *any* home at all). Not saying that’s right, but its economic reality.

 

At the end of that 20 year period, if they have managed to scrape together a very small amount of capital (probably less than the deposit on a “normal” equivalent home) - they are then given the chance to purchase that home for a pittance.

 

As others have said, it’s a deeply flawed policy that reduces council housing stock and unfairly advantages anyone lucky enough to have managed to get into one. Better imo to keep the council house stock and let someone else benefit from the subsidized rent after they die/no longer need it.

[DarkHorseWaits-NoMore]

 

 

Right to Buy homes made £2.8m in profit 'in weeks'

Housing commentator Henry Pryor said: "Far too many... simply profited from a scheme that had much bigger social ambitions."
https://www.bbc.co.uk/news/uk-47443183

 

 

£6.4bn in Right to Buy resale profit

..One tenant purchased their Solihull council home for £8,000 and sold it for £285,000 nine days later.

https://www.insidehousing.co.uk/home/home/morning-briefing-64bn-in-right-to-buy-resale-profit-60624

 

 

 

[nothernsoul]

I also believe if the excrement hits the fan the government will find ways to subsidise or forgive debtors in some way. However, i could never go out and pile on the debt as to do such a thing is not in my nature, i would not be able to sleep at night. 

Who would have predicted, until it happened,  that a so called free market Conservative government,  would cut money from the police force with one hand yet find billions in deposits for overpriced new builds on the other. 

[MattW]

22 minutes ago, nothernsoul said:

Who would have predicted, until it happened,  that a so called free market Conservative government,  would cut money from the police force with one hand yet find billions in deposits for overpriced new builds on the other. 

Agreed, remember the austerity of the early days of the coalition government in 2010: "we're all in this together"? What a load of bullocks Suddenly they find £billions for these damn props to shore up the housing market. I could never quite work out the logic at the time.

[Monkey]

15 hours ago, Dorkins said:

If you genuinely believe that future governments will just chuck money at people who have got themselves into a heavily indebted pickle then the rational course of action would be for you to go out and pile on the debt like there's no tomorrow so that you can get your free money. Have you actually done that? If you haven't then it means you don't really believe this scenario will happen.

My conscience wont let me take on debt to that extent, when i know what the government ia capable of. I'd rather keep my money liquid and my lifestyle fluid if i need it to be. 

But no one predicted SMI instead of reposession, HtB to get people on the ladder, HtB ISAs and other schemes or props.

Outside of the housing market what about the scrappage scheme for cars?

Then the PPI miss selling funded by the government by the back door QE/FLS.

Or that IRs would stay so low for so long.

The Government of any colour will throw anything at this to keep the plates spinning and not let house prices drop or reposessions happen. 

[Dorkins]

25 minutes ago, Monkey said:

My conscience wont let me take on debt to that extent, when i know what the government ia capable of. I'd rather keep my money liquid and my lifestyle fluid if i need it to be. 

But no one predicted SMI instead of reposession, HtB to get people on the ladder, HtB ISAs and other schemes or props.

Outside of the housing market what about the scrappage scheme for cars?

Then the PPI miss selling funded by the government by the back door QE/FLS.

Or that IRs would stay so low for so long.

The Government of any colour will throw anything at this to keep the plates spinning and not let house prices drop or reposessions happen. 

"when I know what the government is capable of" - does that mean you don't actually trust the government to ride to the aid of the heavily indebted?

SMI was changed from a handout to a loan. S24 and second property stamp duty is forcing BTL buyers out of the market, which by reducing demand would be expected to reduce prices. Right to Buy was already abolished in Scotland and Wales. The Help to Buy mortgage guarantee scheme was ended by the government in 2017 and it is now considering how to exit the equity loan scheme. The direction of policy is actually turning against HPI.