PropVestment in Daily Mail: Wise councils: Spacious and solid, ex-local authority houses can be a very good deal

By Graham Norwood.   Original article
Last updated at 9:56 AM on 5th November 2010

Thirty years ago, in October 1980, Margaret Thatcher introduced the right for council house tenants to buy their homes.

Millions took her up on the offer, and there are now around two-and-a-half million former council flats and houses in the private sector.

These days estate agents say that many of those homes are as good as or better than their privately built equivalents. A central location is one of the biggest advantages of many former council homes, especially in large cities and particularly in London.

Transformation: A former council block in SohoTransformation: A former council block in Soho, as good as or better than their privately built equivalents 

‘Buying a former local authority property will usually allow you into an area you might not have been able to afford otherwise,’ says George Franks, of estate agency Douglas & Gordon.

Another advantage of former council flats and houses is space – they tend to be considerably bigger than most of their private equivalents.

Franks says most former local authority housing in the private sector consists of one and two-bedroom apartments in blocks and other flats in converted houses.

There are some former council houses too, usually with three to five bedrooms, though these come on the market less frequently than flats. Flats in blocks are typically available leasehold, with the councils retaining the freehold.

‘Councils make good freeholders and manage buildings efficiently,’ says Franks. ‘Service charges are usually very good value for money.

residents take pride in their building. It’s a myth that all ex-council flats are in large blocks; many are in Victorian houses and on the whole the buildings are well looked after.’

Mod cons: The £495,995 two-bedroom contemporary pad Mod cons: The £495,995 two-bedroom contemporary pad 

These attributes attract firsttime buyers, such as 22-year-old Nirav Shah. ‘I bought a three-bedroom flat at Waterloo two years ago when I was a student,’ he says.

‘My father acted as guarantor. We looked at lots of properties and none of the private apartments came close to the former council flat in terms of location, size or condition. Each of the three bedrooms is easily large enough for a double bed.

The rise and fall of right to buy

  • The Thatcher government’s Right To Buy scheme allowed local authority tenants to buy their homes at a discount, as long as they had lived there for a minimum of two years.
  • The discount started at 32 per cent for houses and 44 per cent for flats, increasing with the length of the tenancy up to a maximum of 60 per cent and 70 per cent.
  • If the flat or house was resold within three years, some of the discount had to be repaid.
  • As A further incentive, the government also offered tenants a 100 per cent mortgage from the local authority.
  • From 1980 to 2010, 2.5 million council properties were sold this way — about half of all council housing in Britain.
  • In 1980, home ownership was 57 per cent. Now it is about 68 per cent. HSBC says almost all of the 11 per cent rise is directly attributable to council house sales.
  • In 2003, the maximum discount for council tenants to buy their council house was reduced to £16,000 in many areas.

‘The council fitted double glazing to the entire block and we’re paying our share over five years, interest- free. We’re delighted becaus that has improved the apartment, which has already risen in value since we bought it.’

Nirav has set up rental consultancy service and lets out his flat to students.

‘There’s never a problem finding a tenant for that location,’ he says.

‘Most of the people in the block are young professionals or private renters like my tenants. It’s been a good buy for me.’

Decent space and design in council flats are a result of the Parker Morris Standards.

They ruled, among other things, that there should be 355 sq ft of internal space for the first occupant of a property, and 140 sq ft for any additional person. That means a one-bedroom council flat built for up to two people should have a minimum of 495 sq ft.

This is twice as large as many private, newer apartments. Morris Standards were applied to council homes built from 1967 – so properties from this era are particularly worth considering. There are downsides to buying in a council block, though.

‘Service charges are low, but often the council will not collect any funding towards major works,’ says Ben Everest of LDG estate agents.

‘So when that work is carried out, private tenants have to pay large lump sums.

Also, if the block has a lift, you can expect it to be basic.’ Some blocks are mixed private owners and council tenants, which will certainly not suit everyone. LDG has a two-bedroom f ormer council flat that has been transformed into a contemporary Soho pad, within a short stroll of Oxford Circus, for £495,995.

Right to buy has been facing scrutiny as a result of a shortage of council housing stock.

The policy is being dropped in Scotland and Wales because of housing shortages exacerbated by the recession. But Conservative housing minister Grant Shapps says there are ‘absolutely no plans’ to change the policy in England.

LDG: 020 7580 1010,

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