The Grade-II listed London building went under the hammer at a Savills auction on Monday, fetching £2.96 m from an anonymous buyer.
The empty property was being sold by Southwark Council to raise funds for 20 modern council houses.
But before the sale could be finalised more than 20 protesters from the community group Homes For All occupied the building at 21-23 Park Street, Borough.
Wayne Davies, 26, a chef who used to used to work in nearby Borough Market, said: "When we found out this house was being sold off for millions of pounds, we wanted to hold Southwark Council to account. We wanted to make clear that we are outraged by the council's approach to social housing.
"This is part of the council's strategy of social cleansing. We are considering now what to do and how to take this further.
"But I'm sure the buyer can rest in confidence that he will get his property. We all know how these things end; we will be forcefully evicted. The buyer is not necessarily to blame here, it's about the council."
The squatters hung banners outside the property. One read "Homes for all!" while another says "stop social cleansing". Mr Davies said the group will take shifts at the house for the foreseeable future.