Tenants in the private sector now renting ex-council homes that were sold through the Right-to-Buy could be costing taxpayers £2bn a year extra in housing benefit.
The claim is in a People, Place and Policy paper which examines the impact of right-to-buy re-sales on the overall £22bn annual housing benefit bill.
Around 2.5 million ex-council homes have been sold in the UK since right-to-buy was first introduced over 30 years ago, and the report says that in a ‘significant’ number of cases, they have ended up in the private rented sector, with many of the tenants on housing benefit.
The paper estimates that claimants of Local Housing Allowance – the benefit paid to tenants in private rental accommodation – who live in ex-council houses constitute 40 per cent of claims in some areas.
It says that the cost of paying LHA to private tenants living in former council houses ‘significantly’ exceeds the capital income generated by the sales of those properties.