“We also know people benefitted from massive discounts and then sold it on, and it’s now been let to tenants who pay market value rather than social rent. We also know there’s a massive housing crisis in London, so I support councils bringing back into council use these ex-council homes, but it’s unfair that people are profiteering.”
Our investigation into Yo-yo Homes has detailed the profits being made by ex-tenants as councils buy back homes they sold at a discount under Right to Buy. Yo-yo Homes are properties sold by councils, then re-purchased between five and 10 years later.
A loophole means councils are currently powerless to reclaim discounts if homes are sold back after five years.
In Newham, the council area with England’s highest social housing waiting list, the borough’s authorities sold 130 properties for £10.6m under Right to Buy, then repurchased them for £33.4 – a loss of £22.7m
These Yo-yo Homes include a property in E13, sold under Right to Buy in 2015 for £77,300, then repurchased in 2022 for £340,000, a loss of £262,700. Newham Council said it was quicker and cheaper to repurchase the properties, most of which were flats in council-owned blocks, than to build new homes.
Islington Council found itself down £12.2m on 56 homes, after selling them for £9.4m and buying them back for £21.6m.
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Among the homes we discovered was a property on Essex Road, sold under Right to Buy in August 2018 for £175,000, then repurchased in February 2024 for £475,000 – a loss of £300,000. Islington Council told us its Yo-yo Homes were used for families in temporary accommodation, with the borough facing record demand.
Our investigation revealed 43 Yo-yo Homes in Greenwich, housing minister Matthew Pennycook’s constituency, with taxpayers losing £6.2m. Southwark Council sold 22 properties for £1.8m then repurchased them for £6m, losing £4.2m
Redbridge Council sold 25 homes for £3m then repurchased them for £7.1m, a loss of £4.1m
The investigation also discovered that Barking and Dagenham Council sold a pair of properties for £127,720, then bought them back two years later for a combined £415,000 – with the express intention of knocking the homes down as part of a regeneration scheme.
“Right to Buy has had a deeply damaging impact on London’s housing system. Decades of forced sell-offs, without the ability to replace those council homes, have hollowed out the social housing stock that families rely on. It has fuelled the housing crisis we see across London and Camden today,” said Camden’s cabinet member for better homes, Sagal Abdi-Wali.
“The law must be reformed so we can safeguard good-quality social housing for future generations. These opportunities to return former Right to Buy properties to genuinely affordable, secure social housing is a vital step towards rebuilding the council housing our communities urgently need.”
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Read more of Big Issue’s investigation into Yo-yo Homes:
Since 2011, the number of London households in temporary accommodation has almost doubled to 69,000. Of those, almost 7,000 are living in bed and breakfasts, and nearly half have been moved to a different borough. This crisis has produced a £740m financial black hole across the capital, with around £1 in every £10 paid in council tax bills spent on temporary accommodation.
Right to Buy has meant the loss of over 300,000 council homes in the capital. Nationally, the government hopes its reforms of the system will prevent the loss of 25,000 social homes in the next five years.
Councils said the Yo-yo Homes were funded by their own finances and grant funding.
Khan has also provided cash for councils to repurchase lost council homes. He introduced the Right to Buy Back programme from 2021-2023, and then the Council Homes Acquisition Programme.
The maximum discount in most parts of London was reduced to £16,000 in November 2024, down from £136,400, as the government looked to reform Right to Buy. Khan has previously said he wants the government to go further than this and allow councils to be able to end the Right to Buy.
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Khan’s comments add to growing discord over Yo-yo Homes. Paul Dennett, Andy Burnham’s mayor in Manchester, said Labour needed to “urgently” speed up its reforms to extend the period in which councils can reclaim discounts from five to 10 years.
In Swindon, a Green Party politician unsuccessfully attempted to make the town’s leaders reveal the full amount taxpayers had lost on Yo-yo Homes in the past decade, with the council’s Labour housing chief branding it a “waste of time”.
Do you know more about this story? Email Big Issue reporter greg.barradale@bigissue.com
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