To not be outraged by people 'taking advantage of' Right to Buy?

[WeBuiltThisBuffetOnSausageRoll]

www.bbc.co.uk/news/uk-47443183

This article is about criticism of people making a profit with Right to Buy. It says that 140 people in GB made a collective profit of £3m by buying and selling their houses in the space of one month, including a man in Solihull who bought for £8K and sold for £285K just over a week later.

Firstly, the 'profits' amount to an average of under £22K each, so hardly a vast fortune.

Secondly, unless I'm mistaken, the idea of RtB is to take into account all of the rent that the buyer has already previously paid - that's why buyers get a very generous discount on the market value, so a 'profit' is clearly built into the system as a fundamental principal.

Thirdly, the people have to live somewhere, so it's not like they can just pocket the cash and continue as they were - in order to sell the house, they must vacate it, meaning that they have to buy somewhere else to live (or pay a much larger private rent, which would rather defeat the purpose of their selling in the first place). Considering that ex-council/HA houses and areas tend to sell for less on average than houses in areas that have always been privately owned, buying a different house with the proceeds is likely to leave them worse off - unless they seriously downsize - maybe their children have now grown up and left home - which means that a desperately-needed larger family house is being released into the system.

If RtB sale prices are calculated to take account of rent already paid over the years, then the buyer will, on paper, have likely made a handsome profit. What difference does it make if they remain living in a house for which they paid a knock-down price for another 20 years or if they sell it straightaway and buy a different house which they are then able to buy mostly with the proceeds of their generous 'discount'?

Am I missing something here?

@WeBuiltThisBuffetOnSausageRoll
Why should private landlords be penalised? After 5 years of having bought a property, renovated it and made it habitable for tenants, paid tax on the income and maintained that house you probably haven’t started to break even yet, nevermind profited. I know because I’ve done it. So you’re then removing the incentive for landlords to invest and provide good quality housing. For many landlords (and I’m talking about those who have a handful of properties not a huge porfolio, who have invested recently in this tough market) they’re relying on capital growth over years and years and actually the short term profit isn’t worth the time and money spent on the property. You only need one crap tenant who trashed the place to totally wipe out profit for a couple of years.

I remember Labour politicians ranting endlessly about the unfairness of RTB and promising to stop it. Shame they didn’t keep their word during the 13 years they were last in power.

There is nothing wrong with right to buy. What is wrong is that the money was never ring fenced and used to build or buy another house for the council or (now) housing associations.

So very little to hardly any of the houses were replaced. That's the problem along with lots of structural problems in the private rental market.

@flirtygirl

Even if the revenue from RTB was ring fenced, the problem is that the properties are sold at a discount and therefore it’s not possible to replace them like for like with that revenue. So there would still be a deficit and thus a drop in available housing. It’s not sustainable.

Foxmuffin. So don't be a landlord. Everyone needs to live somewhere but not many people 'have' to be landlords. No one forced you to buy a property in order to get others to pay for it. Why is it always the poorest who get penalised.

I don't agree that council housing should just be temporary.

*Foxmuffin. So don't be a landlord. Everyone needs to live somewhere but not many people 'have' to be landlords. No one forced you to buy a property in order to get others to pay for it. Why is it always the poorest who get penalised.

I don't agree that council housing should just be temporary.*

Everyone should have somewhere to live but it doesn't need to be owned homes. It can be rented. Rentals need landlords, they need an owner. Plenty of other European countries survive with renting only. Why can't people on benefits do the same?

The poorest aren't being penalised with rtb, they are being placed above people like me who takes no benefits, pays into the system and can't buy without family help or saving for years. But someone on benefits can buy a house for 8k, so basically take out a loan with £150ish payments a month? No that's not fair. I have to take out a massive mortgage to own a house. I get no discounts, no help. Even help to buy in my case is a joke, as I won't even own 100% of the house. Whereas someone who pays low rent through the council for years basically gets gifted a house and makes a huge profit.

Council houses should be temporary for most. Benefits should be temporary for most. But some prefer to live on them for life and do nothing else. More fool them because come retirement age, they have no decent pension. And there's plenty of people out there like that. I know plenty that could easily work, have no health issues to stop them, but sitting on their arse doing nothing all day suits them better.

Here we go, time to grind the faces of the poor again.

I don’t have a priblem with allowing people who have lived in their council houses a long time to buy it - shiuld bevat least 10 years with a requirement not sell within 10 years to retain the full discount. The real scandle was that Thatcher would not allow councils to use the money to build more council houses - thus beginning the housing crisis we have today. Her evil legacy lives in

It's a terrible idea but people are selfish and greedy... if you've been subsidised at taxpayers expense why should you get a huge discount, let alone being able to buy at all. Amazing how many of these folks claim to hate Thatcher though... Two faced greedy bastards

Nope I don’t have to be a landlord. Just like I don’t have to go to work to survive, I could just sign on. But I chose to do that I can invest in my future and retirement. It’s just a way of investing some money. But the immediate return is very small, if anything at all. My point was that selling off private rentals will only penalise landlords and it won’t be cost effective for many landlords. So yes, they could invest their money elsewhere and not in property which is no doubt what many would chose to do (rather than make a massive loss). But it’s not comparable to selling council stock as a model it wouldn’t work.

Council housing being temporary might free some up for more in need. It’s such a shame that some people can’t get on the property market at all, yet like pp others are able to pay reduced rent.

I don’t know what the solution is but I’d like to see everyone who can’t be housed housed, there’s so many homeless and so many in unsuitable housing.

I blame the system not the people who take advantage. Every penny from the sales should have funded new council or housing association properties, and there should have been sell-on clauses (say 10 years before you could sell, for example).

Councils can be landlords. In theory you can get a council house if you want. You can go on the list. But there are not enough council houses. That is the problem not the people who live in council houses or even those that buy their council houses.

Council renters don't pay reduced rent.

alsohuman innit. Fuck over the poor then blame them for being poor. Nothing changes.

The capitalist system needs to be binned. It values all the worst things.

Councils can be landlords. In theory you can get a council house if you want. You can go on the list. But there are not enough council houses. That is the problem not the people who live in council houses or even those that buy their council houses.

And how do the councils fund that when already struggling and are selling the current houses off for basically pennies in comparison to normal pricing? Especially when you have people on other threads begrudging paying an extra couple of quid a month funding the police?

Please, inform people that they need to spend another £5 a month on council tax to fund council housing after their councils foolishly sold them off. Let's see the outcome of that.

It's not just housing that is fucked.the whole system is. We need a complete overhaul. It's not lack of resources it's inequality in the distribution if resources

Well, it is lack of resources that us a problem. We can't house people if we have no houses. It's pretty obvious, but clearly not to the councils. So instead of keeping them they sell them. Makes sense...

in our area it seems that councils use rtb to get rid of housing stock that is becoming expensive to maintain.

There are 200,000 empty homes in england.

In places like Cornwall locals can't afford to buy or rent while houses are owned as 2nd homes or rented out as holiday homes.

500 high rise developments in London. Mist will go to foreign investors and ve left empty.

Some examples of unequal division of resources and resources going to waste.

And who is going to buy them? The cash strapped councils? I don't think you are quite getting the point. They don't have any money.

Resources are shit. So you think the best solution is to sell what little they have? It's that kind of thinking that keeps us in this mess.

I've always felt that right to buy should actually be 'if the house is going to be sold ANYWAY you have the right to buy it' - not gets to X time and you can buy it

I don't blame people for taking advantage of RTB, but I think RTB is inherently wrong and should have never have been allowed.

^ This.

The policy of selling off publicly owned assets should never have been created. It's been disastrous for society, and for most people (who have suffered through house price inflation and reduced availability of good quality social housing). Only a tiny minority have benefited, which is not what public policy should be aiming for.

Yet someone in a council house, not paying into the system as much as the rest of us, can pay below the rental charges for a number of years, and then be entitled to buy the house for a discounted rate.

Why do you assume a council tenant pays less into the system and below the rental charges?

@Foxmuffin
Why should private landlords be penalised?...

I'm not saying that they should. I was just pondering aloud in the light of the current RTB situation and I'm very far from convinced that my ponderings would have been in any way practicable.

I appreciate that private landlords with one or a few properties are often not the bad guys - and that it is often a carefully-considered investment to provide a living and/or pension rather than a get-rich-quick scheme at the expense of the tenants.

Also, whilst there are many people forced to rent who would like to buy, there are also plenty of folk who genuinely want to rent - maybe those who move around a lot or whose companies pay their accommodation costs as part of a high-flying executive package.