The ‘Yo-yo Homes’, revealed: How ex-council tenants make over £200k selling homes back to councils

The ‘Yo-yo Homes’, revealed: How ex-council tenants make over £200k selling homes back to councils



by BestButtons

8 comments

  1. > Until March 2015, the property was a council house. Then the tenant decided to buy it under Right to Buy. For that, Swindon Council got £30,000.

    > Records suggest it was sold in April 2021 when, in the space of six years, the owners managed to turn each pound into five, selling the house for £150,000.

    > The buyer? Swindon Borough Council. The same council that had sold 8 Frobisher Drive bought the property back for five times the sale price, with the ex-tenant netting £120,000 in profit at the taxpayer’s expense. To add to this, Swindon council then spent a further £7,816 on repairs – putting its total loss at close to £130,000.

    > A legacy of Thatcher’s government, Right to Buy gives councils no choice but to sell off homes at a discount to tenants who have lived in them for as little as three years. Data obtained by Big Issue under the Freedom of Information Act from 53 councils in England, shows these councils sold 20,836 homes under Right to Buy in the past five years, securing £2.25bn in the process.

    > But the thing is, councils really, really need homes. A homelessness crisis is stretching budgets to breaking point. So much so that they’re willing to spend huge sums of money to get these properties back. These same 53 councils purchased 8,590 properties from 2020-2025, at a cost of £2.12bn. That’s an average of around £40 million per council. At least 4,414 of those – more than half – are properties previously sold under Right to Buy. In effect, councils are trying to reverse the Right to Buy while the government keeps the policy going.

    > Labour has declined to follow Scotland and Wales in abolishing Right to Buy entirely. Instead, it has launched a **series of reforms branded an “attack on aspiration” by the Conservatives**.

    > New-build social housing will exempt from the policy for 35 years, while the time residents must live in a property before having the option to buy will increase from three years to 10 years. But at present these are just plans, with the government telling Big Issue they will “legislate when parliamentary time allows”.

    > The maximum discount, previously 70% of a home’s value up to £136,000 in London or £102,000 elsewhere, has decreased to a maximum of 15%.

    > Experts said Labour’s reforms won’t necessarily stop Yo-yo Homes impoverishing councils in the here and now, with properties already sold unlikely to fall under the new rules, creating a stock ready to be flipped. Wright said our findings made the case for a limit on how much somebody can sell a home for if they’ve bought it through Right to Buy.

    > “You can’t expect to get a massive discount at the behest of the taxpayer and local authorities and then expect to be selling your property at market rate when you didn’t buy it for market rate. It’s just not fair,” said Wright. “You’re expecting other people to foot the bill for your discount. I think that having a cap on what you’re able to sell it for, and probably sell it back to the council for, is very reasonable.”

  2. Right to buy was a mistake, and so too is this dysfunctional system where we’ve got a housing shortage and the response is to spend taxpayer money buying up existing homes (competing with owner occupiers and private renters, pushing prices up) rather than building new ones.

  3. That’s because right to buy was another ideological Tory raid on the state to purchase votes.

    Always has been, needs repealing already.

  4. It is the system that is broken, I wont argue for or against right to buy, it’s not my place to do so.

    Currently Right to buy (in England) has a stipulation that the council has right to first refusal of a home that was bought under the scheme for the first ten years if it is going back on the market and it has to be at the full market value if they accept. so in this case, the council going ahead with it is fully on the council. Additionally, if you sell within five years of buying through the scheme, you pay back a percentage of the discount you got when you bought it, decreasing 20% each year you’ve had it. So I can see why the owners sold in the sixth year of owning it.

  5. swindon council got 30k.

    youre telling me they sold a house in 2021 for 30k.

    either scrap right to buy or set the price at market value.

  6. This country is a joke, everyone is insane.

    When the giant crisis hits just know that we deserve it. Everyone will be all shocked pikachu when the government essentially goes bankrupt and there’s wild inflation and IMF bailouts etc but it’s completely obvious what is happening.

    You can’t run a 5% budget deficit in peacetime and do ok.

    The whole “fiscal rules, debt falling as a percentage of GDP in 5 years time” is such a joke, I mean 5 years ago they said debt would be falling as a percentage of GDP this year? Is it? Are we getting 5% GDP growth??

    What you get is every year it’s “spend now, cuts tomorrow” and the cuts never come and things get more out of control.

    And we can’t bare to touch those poor precious boomers winter fuel payments and so we let them live coddled in their fantasy land.

    You are not going to get to retire from your job.

    You are not going to have a state pension, or if you do it’ll be so whittled down by mass inflation that it’ll be pennies in todays money.

    Am I crazy? I hope I’m crazy. I just see a ship sinking lower and lower in the water with thousands of holes in the hull and everyone squabbling over how to rearrange the deckchairs.

  8. Right to Buy was always a bad policy, and as house prices have gone up, it’s got worse and worse.

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