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One in seven council homes sold to tenants on housing benefit under Right to Buy
One in seven council homes sold through the Right to Buy since David Cameron hiked discounts in 2012 has been bought by a tenant on housing benefit, Inside Housing research reveals.
In order to secure a mortgage necessary to purchase a Right to Buy property, a tenant on housing benefit would need someone else to provide the finance.
In most cases, this is likely to be family members looking for an easy route onto the housing ladder but it could also be lenders seeking to profit illegally.
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The new figures – obtained through the Freedom of Information Act – prompted Labour to call for an investigation into the scale of Right to Buy fraud.
Katrina Robinson, chair of the Tenancy Fraud Forum and a solicitor at Shepherds Bush Housing Group, said: “The Right to Buy is so open to abuse. There are so many loopholes for fraudsters to abuse the system.”
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Inside Housing gathered data from 95 of England’s 165 stock-retaining councils showing that they have sold 4,686 properties to tenants who were in receipt of housing benefit at the point of sale since discounts were raised – 14.4% of their total Right to Buy sales in that time.
These public assets had a combined market value of more than £517.6m, while the average Right to Buy discount is 45%.
“This research should set alarm bells ringing in Whitehall,” said shadow housing secretary John Healey.
“The Conservatives’ massive Right to Buy discounts have created a golden opportunity for fraudsters looking to make money out of public homes.
“Ministers must now launch an inquiry into the extent of Right to Buy fraud as part of a full value for money audit of the decision to hike discounts in 2012.”
Labour’s policy is to suspend the Right to Buy.
The Ministry of Housing, Communities and Local Government insisted that it takes Right to Buy fraud “very seriously” and said it has worked with social landlords, lenders and others to try to mitigate the practice.
And it argued that excluding tenants on housing benefit from the Right to Buy would unfairly penalise those on low incomes, including people whose capacity to work is limited by a disability.
A spokesperson added: “Everybody deserves the opportunity to realise their dream of homeownership, and so far Right to Buy has helped nearly two million people to buy their own home.”
