The price paid for the building, encompassing what were numbers 21 and 23 Park Street, Borough, was £710,000 above the £2.25m reserve price and enough to fund 20 new council homes in the inner-London area.
However, as the hammer came down, local housing campaigners were occupying the building to try to stop the sale. They said 25,000 people in the borough needed council homes and described the sale as part of a process of "social cleansing" in the capital.
The Grade II-listed property was built by the Anchor Brewery in 1820 for its managers and directors, and was owned for a time by the brewer Courage before passing to Southwark council, which used it for housing stock.
Advertised as a single 5,500 sq ft, six-bedroom family home, the building needs extensive repair and refurbishment but its proximity to the Shard and fashionable Bankside area of the capital puts it in a prime part of a borough where house prices have risen by almost 10% over the past year.
Southwark said it made more economic sense to sell than to spend money on upkeep, with one councillor describing the decision as a "no-brainer".
After the £2.96m deal was closed, Councillor Richard Livingstone, cabinet member for finance and resources, said it would allow Southwark "to fund approximately 20 new council homes to be built to high standards and low energy costs". He added: "The money raised from this sale will help deliver our plan to build 11,000 new council homes in Southwark, one of the most ambitious schemes of its kind in the country." Campaigning group Housing Action Southwark & Lambeth occupied the building to protest against the sale of council housing to private developers. Sarah Morris, a local housing campaigner involved in the action, said: "Southwark council has a waiting list with 25,000 people in need of quality, secure, and truly affordable housing that this building once was. In the face of such housing need in the borough, London, and the whole of the UK this sale of council housing is madness."
Morris said the sale of the building was "part of the social cleansing that is happening across London where local working-class residents are being forced out so that wealthier people can buy it up."
Commenting on the protest, Livingstone said: "It's a shame that it appears that some people wish to stop the building of much-needed new council homes in the borough. Squatting of residential property is a criminal offence and the police have been notified."
Chris Coleman-Smith, head of auctions at Savills and the auctioneer who looked after the sale, said: "There was a really good cross-section of people bidding, with eight or more people having a crack at it."
Coleman-Smith said the building had prompted interest from dozens of developers and private buyers from London and overseas.
He said: "We have had all sorts look at it - foreign buyers including a gentleman from China, local people, owner occupiers and developers. There was interest in it because it is unique - we don't get many historic buildings coming up like this."
The buyers of the homes did not want to be to be identified, but the auctioneer said he hoped the properties would be "made into residential properties and returned to their former glory".