A council house tenant in Kirklees managed to get a stunning £78,000 discount when they bought their home, the Examiner can reveal.
Figures obtained by the Examiner show hundreds of Kirklees Council owned homes have been sold with discounts of between £20,000 and £60,000, thanks to the government’s ‘Right To Buy’ (RTB) policy.
A handful have been sold with incredible reductions of between £60,000 and £78,000.
The highest value saving – a staggering £77,900 discount, the maximum cash saving allowed – was achieved on a three-bed house in Honley, worth £165,000.
Meanwhile the biggest discount was an incredible 70% reduction – the maximum allowed – on a council home in Holmfirth.
The huge sums being knocked off the prices are due to changes to RTB, imposed by the government in April 2012.
The Local Government Association (LGA), which represents councils across England and Wales, has accused the government of sparking a “fire sale” of social housing across Britain.
RTB encourages council tenants to buy their homes but Kirklees Council only gets to keep one-third of the money generated by the sale.
Information released by the council shows it has been forced to sell 4,234 council houses since 2002 because of RTB.
RTB has been possible since the Conservative Thatcher government of 1980 with sales as high as 992 in 2003/04.
Sales slumped in 2008/09 because of the credit crunch hitting a low of just 36 in 2011/12.
But sales are now rocketing again after the size of the discount was quadrupled for some and the eligibility criteria relaxed.
The longer you have lived in your council house the bigger the discount you can gain.
In 2016/17 discounts totalling almost £7m were given to the 191 social housing tenants in Kirklees, who bought their homes under RTB.
Clr Cathy Scott, Kirklees Council’s cabinet member responsible for housing, said the RTB policy was not working for taxpayers.
She said: “Whilst I would like to encourage home ownership, we should be building more affordable homes to allow people to get on the property ladder.
“Looking to the council to support the replacement right to buy housing will never work as the cost to build far outweighs the revenue the council receives from the sale.”
Clr Scott provided the Examiner with data to show the scale of the problem.
It shows the sales under RTB have surged over the past six years as tenants became aware of the larger discounts.
The year of the new discount saw an immediate rise from the all time low of 36 to 110 sales.
Sales then rose year on year to 151 in 2014/15 before hitting 191 last year.
In the first nine months of 2017/18, 146 have been sold.
Over the past six years, the discounts have totalled almost £31m.
The LGA has warned the RTB scheme has become unsustainable unless councils are given the powers to set discounts locally and replace every home sold.
Councils have only been able to replace around a fifth of homes sold since 2011/12, impacting on their ability to provide housing for homeless and vulnerable families.
Kirklees Council has large schemes planned for Ashbrow, near Bradford Road, and at Soothill.
The LGA is calling for the government to completely scrap the cap on the amount councils can borrow to invest in new and existing homes.
Clr Judith Blake, leader of Leeds City Council and LGA housing spokesperson, said: “Councils support people’s aspiration to own their own home and Right to Buy is one way of doing this.
“However, selling council homes at a discount of nearly half price has led to a social housing fire sale that threatens the future of the scheme.
“The rate of homes sold under RTB combined with the restrictions on councils is making replacing homes sold virtually impossible.
“This loss of social rented housing risks pushing more families into the private rented sector, driving up housing benefit spending and rents and exacerbating our homelessness crisis.
“This is particularly concerning as many of the homes sold through the scheme ended up being rented out privately at more expensive rates.
“For RTB to work, councils must be able to replace every home sold. Councils must be allowed to set RTB discounts locally, retain RTB sale receipts in full to replace sold homes, and be given the freedom to borrow to build new affordable homes and play a lead role in tackling the country’s housing shortage.”
The 10 largest discounts in the last five years are:
2017:
A three-bed Honley house was sold with a discount of £77,900 – the market value was £165,000 but they walked away with the property for £87,100.
In Holmfirth a three-bed house with a market value of £108,000 was sold for just £32,400 – a discount of £75,600 – a stunning 70% off the market price.
In Deighton a three-bed house with a market value of £105,00 was sold for £34,650 – a discount of £70,350.
And in Marsh a three-bed house with a market value of £105,000 was sold for £31,500 – a discount of £73,500.
2016:
A Linthwaite three-bed house with a market value of £100,000 was sold for just £30,000 – a £70,000 discount.
A three-bed Liversedge house with a market value of £115,00 was sold for £43,700 – a discount of £71,300.
A three-bed Mirfield house with a market value of £100,000 was told for £39,000 – a discount of £61,000.
2015:
A Slaithwaite three-bed house with a market value of £110,000 was sold for £37,400 – a discount of £72,600.
A Golcar two-bed house with a market value of £100,000 was sold for £36,000 – a discount of £64,000.
A three-bed Batley house with a market value of £90,000 was sold for £27,000 – a discount of £63,000.
