IT is one of the most divisive policies of recent times, but for one Bury resident the Right to Buy scheme has proven extremely lucrative. BRAD MARSHALL reports.

A FORMER council house tenant in Bury made 12,460 per cent profit in only twenty days after selling the home they had purchased under the Right to Buy (RtB) scheme.

One of the most divisive policies of the last 40 years, RtB offers large discounts to council tenants who buy their home.

Many of those who purchase through RtB go on to sell their homes and make a profit.

But despite being widely popular, the policy has been blamed for contributing to a lack of social and affordable housing.

Across the North West some 8,700 RtB sales were made between July 1999 and March 2018, generating a combined total profit of over £276 million, data published by the BBC has revealed.

The Bury vendor made the most lucrative deal of any RtB tenant in the North West, selling their home for £157,000, after purchasing the property for just £1,250 in March 2017.

This huge profit margin meant the tenant made £7,800 for each day they owned the property ­— far exceeding the regional average of £20 by 77 times.

Almost all North West RtB sellers made a profit on their property ­— with only 125, equal to just over one in 40 of those for whom data is available, making a loss.

However some 387 sellers, or one in 13, made a real terms loss.

Although many vendors were keen to sell their ex-council homes quickly, some remained as occupants for decades.

The longest time a seller kept their property was 34 years, when a Manchester resident who had bought their house in 1983 sold it in 2017.

The shortest was 10 days, when a vendor sold their Pendle house for £32,450 in November 2005.

Kit Malthouse MP, Minster of State for Housing, said: “Under Right to Buy, the government has helped nearly two million people [in England] achieve their dream of home ownership and we are working hard to make sure that everyone in the country who wants it has a shot at getting on the housing ladder.”

Right to Buy was introduced in October 1980 under Margaret Thatcher, and was made available to more than five million UK council house tenants.

At the time Mrs Thatcher said the policy would pave the way for a “property-owning democracy”.

It has since gone through several evolutions, however the core element of the policy has remained the same, offering eligible tenants a discount on the purchase of their home on an incremental scale based on length of occupancy.

If a former tenant wishes to sell their house within 10 years of purchase they are required to offer the council the right to first refusal to buy it back.

For every home sold under RtB the Government has pledged to replace the property on a one-for-one basis.

Supporters of RtB claim it has allowed millions of people a chance to get on the housing ladder and secure their families financial future.

However the scheme has also been heavily criticised and even labelled ‘disastrous’ by experts.

Opponents claim the policy has distorted the housing market, and blame RtB for a huge reduction in the amount of social housing stock.

Paul Dossett, head of local government at financial services firm Grant Thronton UK LLP, said: “The right-to-buy scheme has been a disaster for the UK taxpayer.

“Not only have they ended up getting less value for taxpayer-funded assets, the subsequent shortage of social housing has resulted in a hike in rent prices which, when the tenant is a recipient of housing benefit, is also funded by the taxpayer.

“Councils have been forced to buy back homes at a significantly inflated price to try and meet demand ­— a financial disaster for councils who are already struggling to remain financially sustainable.”

Commentators have also called into question the Government’s commitment to the one-for-one replacement pledge.

Henry Pryor, a leading housing market and property expert, said: “Clearly. the policy has worked well for a lot of people but the decimation of the nation’s social housing stock leaves huge question marks.

“The one-for-one replacement pledge seems to have been missed by a country mile and central government swiping the bulk of the sale receipts has left local authorities struggling to manage the very real pressures from residents in need of social housing or of developing a feasible plan to solve the problem in the longer term.”

Polly Neate, chief executive of anti-homelessness charity Shelter, added: “While Right-to-Buy has helped some people to get on the property ladder who wouldn’t otherwise have been able to, it’s stored up serious trouble for the future because we’re still building far fewer homes than we’re selling off. The chronic shortage of social housing available is nothing short of a disaster given our current housing emergency.

“Hundreds of thousands of people are homeless and millions more are struggling in deeply insecure and expensive private renting, so replacing social homes on a like-for-like basis is critical. But it’s not just about replacing the social housing that gets sold off – to end the housing crisis for good, we need to go beyond this and build on a much bigger scale.”