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Hundreds of Ex-Council Tenants are now Property Millionaires!
Following the recent decision to end the Right to Buy Scheme in Wales, there have been renewed calls for England to follow suit. The Chartered Institute of Housing has expressed concerns that the ongoing loss of council properties is continuing to impact on the affordable housing crisis as social housing is not being replaced fast enough.

Council homes turned into business opportunity for private landlords

When Margaret Thatcher introduced the Right-to-Buy scheme in 1980, her vision was that more people could own their home. The large discounts offered made this possible for many people who would otherwise not have had the opportunity.

Home ownership was encouraged, and it was believed that if this was sought after and achieved, it would raise the expectations of those on lower incomes to further look to improve their quality of life.

However, 40% of council houses sold under the scheme in London are now rented out privately. This goes completely against the original intention of home ownership by allowing people to turn the scheme into a money-making business opportunity.

This has also made the rental market far more expensive for potential tenants as the average rent charged by private landlords across England is £690 per month, compared to just £374 for a council property. This rockets to an average price of £1,473 in London, which is 3 times the average amount charged by the Local Authority (£468).

On top of the price increase, this has also led to much less security for tenants. Whereas council tenants know that they have the security of their home for many years, private landlords can give you just one months’ notice to leave.

London Council Houses
London Council Houses - Shepherdess Walk

How did it all start?

Back in 1979, 42% of people living in the UK lived in council homes. Since 1980 council and social housing tenants have been able to purchase their homes through the ‘Right to Buy’ scheme at a discounted price. The scheme was introduced as an opportunity for tenants to improve their financial situation, and since it started, around 2.6 million council homes in the UK have been sold to council tenants.

How have so many people managed to make so much money from buying their council home?

When the Right to Buy scheme was first introduced 39 years ago, provided a person had been a council or social housing tenant for at least 3 years, they could purchase their council home at a discounted market value.

The Right to Buy rules and discounts have varied over the years and also for different parts of the country. In England and Wales, back in the 1980s and 1990s, council tenants could apply for the Right to Buy their council property. The council would value the property and apply a discount, which would be dependent on how long the applicant had been a council or social housing tenant. Back then many people qualified for the maximum discount, which was 60% for a house and 70% for a flat.
Number of council properties in England
English and Welsh flats diagram

An added bonus was that, since mortgage companies were taking a charge over a property worth a lot more than the purchase price, they were more than happy to lend 100% of the purchase price. This meant that tenants could buy their home without having to find a deposit, replacing a rental payment with an often much smaller mortgage payment. From the mid 1990s, some mortgage and bridging loan companies would even lend amounts over the purchase price, providing additional funds for home improvements and other uses.

Even with borrowing the extra funds, most people who purchased their council property had a monthly mortgage payment that was no more than their rent. Obviously as interest rates changed so did mortgage interest payments, but since the mid 90s rates have remained fairly low, whilst rents have continued to rise.

However, due to significant increases in property prices in some areas, in particular many parts of London, the rewards for some of those who purchased their homes have been huge. Consequently there are now hundreds of ex-council tenants who, due to taking the step and buying their council property, have since become millionaires!

Where are these millionaire ex-council tenants?

It is no secret that property prices have rocketed in London. According to Savills, the average amount paid for a property in London in 1996 was £79,000. In 2018 the average has increased over 6 times to £478,853! The most expensive areas in London are Westminster, Kensington and Chelsea. The cheapest property on the market at the moment in Westminster is £320,000 - and that will only get you a studio apartment! According to Zoopla, the average price for a property in Kensington and Chelsea is around £1.8 million.

London House Price Increase
Diagram of house prices

Right to Buy sales peaked in London in 1990 when 26,260 council homes were sold in that year alone.

Council tenants who purchased their flats in a 9 storey block in Clarendon Place, Westminster, have done particularly well. Some three-bed flats, that were once owned by the local authority, have sold within recent years for £2.25 million and £1.8 million. Another of the flat owners in the same block managed to make a profit of over £1.6 million, when they sold it just 6 years after purchase.

Other Londoners have done well too. Over in Hackney, ex-council houses in Shepherdess Walk have been selling for between £1m and £2m. One property was purchased for £171,000 by the tenant in 2000 and later sold for £1m in 2014, whilst another was purchased through the Right to Buy scheme for £220,000 in 1997 and later sold in 2013 for £1.94m.

Examples of ex council properties where the purchasing tenant has made over £1m
Value diagram of properties


Falmouth House - a 9 storey council block with 45 flats

The council sold flats in 1995 ranging from £50k to £150k (after discount).

In 1997 they sold a flat for £100k, another for £145k in 2000 and also £176k in 2011, all under Right to Buy so were at discounted purchase prices.

Flats in this same block later sold for:

£1.895m in 2013
£2.1m in 2014
£1.85m, £2.25m and £2.7m in 2015
and for £1.825m in 2016.


A flat in Middlesex Street was purchased for £125k after discount, then sold in 2016 for £1.4m


In Shepherdess Walk a terraced house purchased under Right to Buy for £120k in 2000 and was worth over £1.4m in 2017.

Same area a flat purchased from the council for £220k in 1997 sold in 2013 for £1.94m. This is an average increase of over £100k per year, tax free!


A flat in Branch Hill was purchased after discount for £130k in 1995, and another in the same block for £240k in 1996.

In 2014 a flat in this same block sold for £1m.


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