The investigation revealed that discounts of up to £100,000 are being offered to London-based social tenants to buy their own homes with some then re-selling them on the open market for sums of more than £1m.
Research from the Audit Commission published in October last year highlighted the extent of Right to Buy exploitation across England. It reported a 400% increase in Right to Buy fraud cases from April 2012 to March 2014. In 2013/14 these were worth £12.3m. The rise in the number of these frauds followed large increases in the discount threshold over this period.
In July 2012, the then housing minister Grant Shapps started a campaign to re-ignite interest in the scheme brought in by former Prime Minister Margaret Thatcher by trebling the discount available in many areas. Shapps made a pledge that every property sold would be replaced by an affordable home to rent.
But Johnson said the huge discounts available were seeing properties change hands quickly and were not being replaced.
“Right to Buy is a disaster for London. A lot of council homes sold today will be in the hands of private landlords tomorrow,” said Johnson. “Across London, almost 5,000 council homes have been lost in the past two years with fewer than one in six replacement homes started, using the receipts.”
Johnson said that less low rent homes in London would drive those on low wages out of London.
“The Mayor of London should lobby for it to be scrapped, and for councils to be allowed to borrow to invest in building many more,” he added.