Maggie’s buybacks
Friday 20th June 2025
Under Margaret Thatcher’s right to buy scheme, council tenants were able to buy their properties at very favourable rates, the buyers only had to hang on to them for five years before they could sell on, without paying back any of the discount they had received.
Profitable stuff.
The secondary buyers were often landlords who have been renting them out ever since. Perversely, often to tenants on housing benefits who might originally have been the council’s direct tenant.
This stupid circular system has cost the taxpayer a fortune.
The other issue is that councils have not built new social housing. In London the problem is exacerbated by the fact there is so little space to build and private development always has the upper hand.
A simple remedy is for the local authorities to buy back the flats within their own buildings, from the current landlords who want to sell up.
For the weary landlord a quick and easy sale back to the freeholder is a good option which should allow the councils to get a good discount.
The Treasury can allow Councils to borrow at preferential rates through the Public Works Loan Board to achieve these purchases.
The flats can then be let to tenants on benefits or used as extra council housing.
The income should cover the preferential interest and, if run as a business, can be offset against the income before tax. Unlike the poor private landlord.
This is the quickest and easiest and least expensive way to increase the social housing stock in London.
Can we just get on with it please?!
A live example-
We are marketing a very good value ex-council flat in western Chelsea where the freehold is still owned by Royal Borough of Kensington and Chelsea (see below).
It has been a good rental investment for some years but now mortgage interest is no longer offsetable against the income and with the anti-landlord Renters ‘Wrongs’ Bill about to be finalised in Parliament, it no longer makes sense for our client to hold on to it- despite the healthy gross yield of over 6% per annum.
Until next time…..
PB
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