RIGHT TO BUY: The great housing rip off?

January 27, 2017

House building at the end of the Second World War had boomed, under Clement Attlee over one-million homes had been built and 80% of these had been local authority properties. Under the Tories, house construction continued to expand and in 1953 the housing minister, Harold Macmillan, delivered a record 220,000 council properties. As Tory rule continued the focus changed and private builders over-took local authorities in terms of the number of properties constructed. Towards the end of the 1950s and following Harold Wilson’s victory in 1964 there was another shift and slum clearance became a priority with high-rise being the way forward. Large council estates with ‘streets in the sky’, such as Park Hill in Sheffield and the Aylesbury estate in London, sprung up across the country. For a time, high-rise housing was desirable but the longer the structures were up, the more problems began to surface; the Ronan Point collapse in 1968 led to a loss in confidence in tower-blocks and fundamental changes to building regulations. In the 1970s the number of local authority properties was higher than those that were privately rented and in 1978, the number of council houses hit an all-time high at 32%. Things were, however, about to change. The Labour government was taken down by a confidence vote in 1979 and at the ensuing General Election, Margaret Thatcher’s Conservative party was brought to power. Mrs. Thatcher championed the idea of a ‘property owning democracy’ and in 1980, the housing act gave five million council tenants in England and Wales the right to buy their council houses. The uptake was huge and by the end of the 1990s, around 1.9 million council properties had been sold. The Labour Party initially opposed the act but was in favour by the 1987 General Election. Considering the housing crisis that currently cripples Britain, why was Mrs. Thatcher’s decision to sell of our council houses such a mistake?

The fundamental reason that the right to buy has been a major contributor to the present-day housing crisis is the fact that councils did not adequately replace the stock that was sold off. Those that purchased their council homes could do so at huge discounts and councils were instructed to use 50% of the money raised to pay their debts rather than build new properties. Since 1980, council house building has fallen every year to an all-time low in the early noughties. Mrs. Thatcher believed that private house builders would fill the gap left behind by local authorities but this never came into fruition and private house-building has not been able to keep up with the current level of demand for housing. In 2012, David Cameron made changes to Right-to-buy and promised that for every council house that was sold, a replacement would be built. In 2016, just one in five of every council house sold was replaced. This is an absolute disgrace when the country has around 1.2 million people on waiting lists for housing and a further 6 million people facing uncertain tenure. Some of those on housing waiting lists have found themselves in Bed & Breakfast accommodation and Caroline Davey of Shelter commented: ‘Every day Shelter sees the devastating effect the shortage of affordable housing has on people, and how their lives could be vastly improved by a decent, secure home.’ Increases in the number of housing-association properties have not been enough to offset the number of lost council houses and despite the failure of right to buy, it is possible for tenants to buy their housing-association home. At the moment, some of the discounts given to right to buy tenants are amongst the biggest ever and this is only further reducing the number of local authority properties causing further inflation to a highly inflated market.

In 2015, figures were released that revealed that around 40% of properties that were purchased under the right to buy are now being rented out privately. Many of these are leasehold properties, such as flats and maisonettes and are considerably more difficult for homeowners to sell on. The fact that ex-council stock is finding its way onto the private-rented market goes against the very principle of Mrs. Thatcher’s policy of a property-owning democracy. These properties are being let out at full-market value and are becoming increasingly expensive. Many of the young-people and working class families that would have once rented these council properties, now find themselves priced out of the market. Some young people face the prospect of never owning their own home and rents across the board have become more expensive even pushing renting out of the reach of some. Many renters are also faced with extortionate letting agency fees and with many applicants for single properties, it can be difficult to secure an adequate home. In some cases, local councils have had to pay private landlords to house council tenants. The introduction of the right to buy and the cuts to council budgets initially led to rises in the rents of council properties and now, with such a large proportion of ex-local authority stock sitting with private landlords, the rents are even higher. In 2014, almost 40% of the £25bn housing benefit bill went to private landlords and since right to buy was introduced, the housing benefit bill has made a steady rise despite the number of claimants remaining much the same. 

Although the famous ‘streets in the sky’ went from being a utopian ideal to crime hotspots and many council estates became stigmatised in the 1970s; the idea of council housing to help those that can’t afford to purchase a house remains. Many of the housing estates built in the fifties and sixties had superb community spirit and were a far cry from the dilapidated, run-down sink estates that they became. The stigma that comes with social housing is based on the false assumption that everyone in a council house is ‘sponging off the state’. This could not be further from the truth and for many of the working-class residents that moved into the first wave of local authority properties, there was an amount of immense pride in their homes. Some of the estates built in the early 1960s by architects such as Ernő Goldfinger and Alison and Peter Smithson were truly revolutionary with their futuristic homes providing accommodation for tenants that had previously lived in squalor. In 2017, when the country faces one of the worst housing shortages in its history, it is time to end Thatcher’s policy and to stop the sale of our remaining council and housing association properties. If this government wants to make a difference to our housing problems; then it is time for another housing crusade and time to build some new quality local authority accommodation on the same scale of some of the estates that cropped up in the late 1950s.

Sources:
http://www.nhbc.co.uk/NewsandComment/Documents/filedownload,59849,en.pdf 
https://www.theguardian.com/society/2016/jan/04/end-of-council-housing-bill-secure-tenancies-pay-to-stay 
https://www.theguardian.com/business/2016/nov/20/britains-housing-crisis-must-be-tackled-now
https://www.theguardian.com/commentisfree/2015/aug/14/right-to-buy-scheme-disaster-housing 
https://www.theguardian.com/society/2015/apr/17/councils-pay-private-landlords-up-to-4000-to-house-tenants 
http://www.independent.co.uk/news/uk/home-news/right-to-buy-40-of-homes-sold-under-government-scheme-are-being-let-out-privately-10454796.html 
https://england.shelter.org.uk/campaigns_/why_we_campaign/the_housing_crisis 
http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10787462/Landlords-9bn-housing-benefit-fuelling-bubble.html
Saving Britains Past: Streets in the Sky, BBC2, 31st August 2009.

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