It depends what type of properties they're talking about selling. If it's 1960s blocks of high-rise flats, then they have no market value as such - they will be pulled down for redevelopment. If they're talking about selling the freehold on individual houses in attractive London neighbourhoods, then there's no "bad" time to sell - prices are booming, and they could build 10 or 20 homes for the amount they'd gain from a single sale. This is why the idea of selling to rebuild is so attractive, financially at least.Why not rent these 'nice' houses at the market rate? Keep the balance of social housing flexible. I presume the government could reinvest its profits as any normal buy to let business would. If there is that much capital tied up then it could be used more sensibly than this. What sort of policy is it when you choose to sell in a weak market? Is this selling gold all over again?
Can't see the government or local authorities wanting to become landlords to people paying market rates for the area - that's what the private rented sector is for.