Ex-council flats turn into 'goldmine' for BTL landlords

Friday 20th July 2012

Nearly 40% of former council flats in one of the most expensive areas of London have been turned into a ‘goldmine’ for private buy-to-let landlords after being bought at big discounts under Right to Buy.

New figures show that over 3,600 Westminster Council flats sold under Right to Buy are now in the hands of landlords.

The council’s housing scrutiny committee has issued a report which shows that the council sold 9,135 (40%) of its stock of 21,243 flats.

Of these, 3,603 (39%) are now ‘owned by small and multiple landlords’.

In some parts of Westminster, there are now more private tenants on council estates than council tenants.  

For example, in Bayswater the 427 council tenants are outnumbered by 484 leaseholders, and in upmarket St John’s Wood there are 743 council tenants and 849 leaseholders.

Councillors say that some ex-council flats in Westminster owned by buy-to-let landlords are being rented out at £500-plus a week, over four times the average rent of council flats.

Ironically, many of these landlords get their rents paid for by taxpayers, because their tenants are 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.”