July 21, 2022 7.30 am This story is over 20 months old

South Kesteven council tightens money laundering rules for Right to Buy scheme

Large sums appearing in bank accounts have raised questions

The loans were intended to help small companies through tough times | Photo: Adobe Stock

Anti-money-laundering measures have been tightened by South Kesteven District Council after questions were raised over buyers’ cash in the Right to Buy scheme.

The council’s chief finance officer told the Governance and Audit Committee that there had been cases where large sums had appeared in the bank accounts of potential buyers.

The new measures are designed to shed light on the origins of cash used to buy council homes.

South Kesteven District Council sells around 40 homes each year under the scheme, which is designed to make home-owning affordable for renters.

Tenants are entitled to a discount of 35% after three years, which can eventually increase up to 70%.

“It’s good practice to review these policies periodically,” chief finance officer Richard Wyles told the meeting.

“There were a couple of examples where upon examination of the funding source, there were questions asked about the origins of it.

“If you get a bank statement and there’s a deposit of £50,000 and now they’re buying a house, we’re going to want to understand better where it’s come from and satisfy ourselves it’s appropriate.

Buying a house is many people’s dream – but the council wants to make sure their money is legitimate | Photo: Adobe Stock

“There were questions which made us think it would be appropriate to review this form and make it more resilient.”

He added: “We have a legal duty to make sure the qualification process is followed accurately, and carry out our due diligence and preventative fraud measures.”

All applicants will now be required to complete an anti-money laundering declaration form.

Councillors were told that the changes will bring the local authority in line with other councils.

There was more than £30 million fraud in the Right to Buy scheme in 2019/20, according to official figures.