Council makes £27m from auctioning off social housing

Published by Julien Tremblin for 24dash.com in Housing and also in Local Government

A London Council has auctioned a total of 58 social homes worth more than £27 million in the past 12 months, it has been reported.

Hammersmith and Fulham Council used local auctioneer Barnard Marcus to sell the properties to the highest bidder, the Fulham and Hammersmith Chronicle has discovered. In the past 12 months, a total of 58 homes were auctioned for £27,213,826.

One of the auctions, last Monday, saw a four-bedroom flat sold for £284,000. Earlier sales include a couple of two-bedroom flats in West Kensington and Shepherd’s Bush that went for a combined £577,000.

The move has been judged "scandalous" by Labour councillors who claim the council is forcing people out of the borough.

Labour leader Stephen Cowan told the Chronicle: "It is terrible that hard-working, low income families are being forced into the private sector or being moved as far away as Enfield because there aren't enough homes to go round, all while the council is selling much-needed stock."

However, the council defends the move, claiming the homes were in a poor state and it didn’t make financial sense to carry out the improvements required to enable them to be re-let.

Cllr Andrew Johnson, cabinet member for housing, said: “The money received from the sales of these ‘expensive voids’ is used to part fund our capital works programme, which for the coming year will total £35 million, as well as to fund the development of new affordable housing.

“In addition, from April this year will we also have to use some this money to start paying down our £200 million of housing debt when our housing budget becomes self financing as we no longer receive any additional funding from Government. “

According to the council, such debt would necessarily mean higher rents, unless it finds other ways to raise money.

Mr Johnson added: “So if it’s a case of rents rocketing or selling a limited number of empty properties in a poor state of repair to fund some maintenance and pay to the debt, which will cost around £12m a year to service, then it’s the latter every time.”

The council also said it is on track to return to house-building for the first time in 30 years, claiming funding for the first 25 properties has come from selling a number of social homes.