Protesters have taken over a London home billed as the "most expensive council house ever sold" which on Monday raised almost £3m for Southwark council after fierce bidding at an auction.

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".

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."

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".