Only 4,325 Council Houses Left in the Local Area – Opportunity or Problem?

The “Right to Buy” scheme was a policy introduced by Maggie Thatcher in 1980. It gave secure council tenants the legal right to buy the council home they were living in with a huge discount. The heyday of council “Right to Buys” was in the 1980s and 90s, when 1,719,368 homes were sold in this way across the country between October 1980 and April 1998. In 1997, Tony Blair reduced the discount and the number of properties purchased under the Right to Buy declined.

So what does this mean for Bexley Borough homeowners and landlords? Quite a lot, in fact!

Looking at the overall figures, 13,293 council properties were bought by council tenants in the Bexley London Borough Council area between 1980 and 1998. These are large numbers by any measure and are even more important to the whole Bexley Borough property market (i.e. every Bexley Borough homeowner, landlord and even aspiring first time buyers) when you consider that these 13,293 properties comprise a colossal 16.11 % of all the privately owned properties in our area, in which there are only 82,464 in total.

First time buyers and landlords can now buy these ex-council properties second hand. The original tenants and later homeowners of the 80s and 90s have more than exceeded the time in which any claw-back of their discount was due. In most cases, the council discount had to be repaid if the first owner sold within a particular period, usually five years.

Being honest, some ex-council properties lack the vital KSA (kerb side appeal) that landlords often crave. Builders of new homes know all about KSA and dress up the exteriors of their new homes to make them more appealing to buyers. That’s why we have show homes.

Choosing on the basis of what a modern property looks like from outside might be a good way to select a Bexley Borough buy-to-let property in theory, but in a challenging market some Bexley Borough investors find that a more down to earth approach brings the largest returns.

Yes, the modern homes being constructed in Bexley Borough are lovely, but too many landlords purchase buy to let property on the basis of where they would like to live, rather than choosing with a business head and considering where a tenant would want to live.  

Remember that the first rule of buy to let is that you aren’t going to live in the property yourself!

 What an ex-council property might lack in terms of KSA, it can more than compensate for in other ways. Tenants concerned about proximity to a particular school or to family members on whom they rely for child care will be much more interested in location than what a property looks like from outside.

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, their higher yields more than compensate. Moreover, those built between the wars, or just after the Second World War, are very well constructed. Tenant demand for such properties is good as many people can’t get mortgages to buy because Bexley Borough property values are so expensive. Many of them will reconcile themselves to renting, leading to high demand. Also, the fact the council was forced to sell these properties in the 80s and 90s means that today’s younger generation, who would once have qualified for their own council home, have to rent as so many were sold twenty or thirty years ago.

My message to Bexley Borough landlords is not to dismiss ex-council houses and apartments, while always bearing in mind the first rule of buy to let. Go in with your eyes open, and be prepared to take lots of advice. All ex-council properties are different and while some offer good demand and high yields, they can also give other headaches and issues when it comes to running the rental property.

One source of advice is the Bexley Borough Property Blog www.bexleyproperty.co.uk.  You’re also more than welcome to give us a call on 01322 559955 or pop in for a chat. Our office is located in the heart of Bexley Village (next door to the King’s Head Public House).