£30k average gain on Right to Buy homes in Wrexham

An average gain of £30,000 was made by people selling homes they bought under the Right to Buy scheme in Wrexham.

Right to Buy, which offers large discounts to council tenants who buy their home, has been one of the most divisive housing policies of the past 40 years.

The Housing Act came into force on 3 October 1980 including giving the Right to Buy (RtB) to more than five million eligible council tenants in the UK. Prime Minister Margaret Thatcher said it would pave the way for a “property-owning democracy”.

Since its inception, more than 2.6 million former council tenants in Great Britain have bought homes under the policy, according to research by The Chartered Institute of Housing. In Northern Ireland, some 119,000 Housing Executive and 3,000 Housing Association properties have been sold under equivalent schemes.

Supporters say it has given millions of people the chance to get on the housing ladder and secure their families’ financial future. Opponents blame the policy for distorting the housing market and for a huge reduction in the amount of social housing stock.

Since its inception, more than 140,000 homes have been sold under RtB in Wales, 1.9 million homes in England, more than half a million in Scotland, and 122,000 in Northern Ireland.

Across the UK, the devolved governments have adopted differing approaches in recent years. A final cut-off date for applications to buy under the policy across Wales expired on 26th of January this year.

Previously commenting on the scrapping of the Right to Buy scheme earlier this year, Lesley Griffiths AM said: “I am pleased this key Welsh Labour commitment is coming to fruition.

“Abolishing Right to Buy will help reduce pressure on social housing, enabling local authorities and housing associations to invest in new developments safe in the knowledge that their housing stock will not be sold off at discounted rates.”

“Constituents regularly contact my office with housing issues but I am hopeful this move will help ensure sustainable, affordable housing is available for people who need it most.”

The BBC’s Shared Data Unit has compiled a dataset of sales of ex-RtB homes across the UK from the year 2000 to April 2018. The analysis has revealed former council homes bought under RtB in Great Britain and sold on again have made a combined profit of £6.4bn in real terms since the year 2000.

The data states in Wrexham there was an average of 2,695 days (7.3 years) between purchase and sale of a RtB property, with an average profit of £30,086 based off data of 115 homes in the period covered.

In Wales…

• There were some 3,355 sales between February 2002 and March 2018. Of those, there are 1,328 where we have RtB sale price and subsequent sale price to compare
• The total profit made on those ex-RTB homes sales in Wales was £61m or £51m in real terms
• The average amount of money a vendor made between purchase and sale was £19 per day
• Just 32 (2.4%) out of 1,328 sellers made a loss on their home. Some 119 (9%) of vendors made a real terms loss
• RtB homes were kept for an average of 2,948 days (8 years)
• The longest time someone kept their ex-council home before selling was 12,261 days (33.6 years) in Merthyr Tydfil. It was bought in June 1982 and sold on again in August 2016 for £79,000
• One person bought their ex-council home in Cardiff before selling it the next day in February 2013 for £87,000. The RtB purchase price is not available.
• The most money a seller made per day was £1,371. Someone bought their ex-council house in Newport in July 2007 for £7,000 and sold it on in September 2007 for £86,500

The Wrexham data set is below, it is not possible to do comparisons on some data as not all properties had a starting purchase price or similar information.

Right to Buy - Wrexham Dataset