GLOATING property speculators suspected of funding a Westminster “right-to-buy” frenzy prompted calls yesterday for a probe into possible fraud.

As reported in the Star yesterday, opposition councillors on the staunch Tory local authority raised the alarm after a director of London Investment Property Group (LIPG) reportedly told an undercover journalist he would “never have to work again” due to profits from former council homes in the borough.

Nicholas Carlino boasted that his firm was skimming hundreds of thousands of pounds from properties sold well below market value by the council with the purchase underwritten by LIPG.

Once bought the property would immediately switch into Mr Carlino’s hands and the former tenant would receive a pay-off.

Labour group leader Paul Dimoldenberg demanded yesterday that Westminister Council launch an inquiry into links between the number of purchases by housing benefit claimants under the discounted right-to-buy scheme and property speculators.

Mr Dimoldenberg has led a campaign for a probe into the sell-offs but has previously been told that there is no legal requirement for a council to investigate the source of financing for purchases.

“I believe that the council has a responsibility and a duty to investigate further,” he said.

“It is completely unacceptable for the council to shrug its shoulders.”

The Tories sparked a new wave of council house sell-offs in April 2012 by increasing the maximum discount for tenants applying to buy their council homes to £75,000.

In centrally located Westminster the average sale price for a flat last year was over £1 million, while an average terraced property sold for nearly £3m.

Under current housing laws LIPG’s underwriting of council-house sell-offs is legal.