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From Thatcher to Johnson: how right to buy has fuelled a 40-year housing crisis | Housing

‘It feels like a way to change your fortunes – that’s the British dream,” says the writer and housing rights campaigner Vicky Spratt on right to buy. When she began researching Tenants, her new book about Britain’s dysfunctional private housing market, she knew that Margaret Thatcher’s flagship policy, which has seen 2m homes bought by council tenants at massive discounts since 1980, was important.

By the time she finished it, Spratt realised it had “entered the public consciousness like no other policy, and in that respect it’s one of the most successful of all time”.

Thatcher would be disappointed, though. Forty-two years later, the “property-owning democracy” she craved is receding from view. When right to buy was launched as part of the Housing Act 1980, 55% of householders were homeowners. The figure peaked at 72% in the early 00s but currently stands at 65%. Meanwhile, council housing has decreased, too. In 1979, there were 6.5m council homes; now there are 2.2m, while 4.4m households rent privately, twice as many as 15 years ago.

Nevertheless, Boris Johnson recently announced that right to buy will be extended to tenants of housing associations – not-for-profit organisations that let homes to about 2.5 million people at rents of up to 80% of the market rate. Millions of right-to-buyers have “switched identities and psychology”, Johnson claimed, from state dependence to proud self-reliance, echoing Thatcher’s fixation on “the independence that comes with ownership”.

Polly Neate, the chief executive of the housing charity Shelter, has said that extending the right to buy now, when the waiting list for social housing in England stands at 1.6m, is “baffling, unworkable and a dangerous gimmick”.

This is because although right to buy has succeeded spectacularly as a political slogan, its benefits have been starkly unequal. While an older generation of working- and lower-middle-class people gained their first big asset upon buying council homes in the 80s, millions of mostly younger people have now been forced into insecure, grotty, privately rented accommodation.

An aerial view of Forest Gate in Newham, east London.
An aerial view of Forest Gate in Newham, east London. Photograph: AP S (uk)/Alamy

In England, at least, right to buy is implicated at every stage of a housing crisis that has been 40 years in the making. I only fully understood this when I spent several months last year making a BBC radio series, A Home of Our Own, about the ways in which people’s lives have been shaped, for better or worse, by their housing options.

I spoke to Phil Salter, a 79-year-old retired carpenter in Cornwall, who bought his council house in Devon in the early 80s for £17,000. When it was valued at £80,000 in 1989, he sold up and used the equity to put towards a £135,000 fisherman’s cottage in St Mawes. Now it’s valued at £1.1m. “I was very grateful to Margaret Thatcher,” he said.

But back in south London, where Salter had spent his childhood in poor-quality private rented housing, I met Danielle Nicole, a 32-year-old who graduated 11 years ago, still living with her mum in the terrace house she bought in 1990 using proceeds from right to buy. Danielle, an NHS worker, could neither afford to buy – flats in the area cost upwards of £350,000 – nor rent privately, and with no dependants and a reasonable salary she would spend up to a decade on the waiting list for social housing.

Salter and Nicole’s mother bought their homes at significant discounts – the original maximum discount was 50%, rising to 70% in 2012. The trouble was, their children had no chance of getting on the property ladder – at least, until they were able to inherit the home.

A combination of low levels of housebuilding, “landbanking” by property developers and the equity pumped into the housing market by newly flush right-to-buy sellers carried on driving house prices upwards, while wages failed to keep up. As the first wave of right-to-buy beneficiaries sold up and moved on, ex-council homes started to enter the private rental market in ever greater numbers. Former right-to-buy properties now make up 40% of all available private rented housing across England, reaching a staggering 70.9% in Milton Keynes.

Last year I met Dorine, a 30-year-old in Crawley, who lived with her husband, three small children and Dorine’s two teenage sisters in a poky, crumbling, two-bedroom ex-council flat that was now owned by a private landlord based in India. Universal credit paid most of their rent, but when their benefit was suddenly cut because Dorine’s husband did an hour’s overtime one week, they went into arrears on a flat covered in black mould that its owner had never even visited.

Spratt heard a similar story, this time in Wythenshawe, a large garden city-style estate built on the edge of Manchester in the 1920s. She met Amy and Dan (not their real names), a young couple with children living in an ex-council house owned by a bullying local builder-cum-landlord who, they said, was “absolutely wadded” from letting local properties. “Dan’s own family had benefited from right to buy,” says Spratt. His mother had bought her council house, which she still lived in. “But he could see it was the reason there was no social housing and why they were stuck on the waiting list.”

This persistent theme, of housing security for older people resulting in stress and precarity for their children’s generation, is echoed by the ethnographer Joy White in her book Terraformed, an immersive study of race, class and the effects of gentrification in her native Forest Gate, east London. Forest Gate is in Newham, a densely populated borough with as much 1960s council (or ex-council) housing as there are Edwardian terraces. Newham is associated with the partial collapse of Ronan Point, a poorly constructed council tower block, in 1968 and, more recently, with its policy of trying to relieve pressure on its housing waiting list by moving local applicants to homes as far away as Stoke-on-Trent and Liverpool.

“Some people did very well from right to buy. It’s important to say that for some people it worked, and it worked very well, individually,” says White. “But for society, the cost was high.”

A row of terrace houses in Milton Keynes, where former right to buy properties make up almost 71% of rented properties.
A row of terrace houses in Milton Keynes, where former right to buy properties make up almost 71% of rented properties. Photograph: Chunyip Wong/Getty Images/iStockphoto

In Terraformed, White writes about how she was able to move out of her family home and live independently at the age of 20, buying her own flat in Forest Gate on her sole earnings as a civil service clerk. Watching her now grownup daughter and her friends come of age in a time where there are no such options was one motivation for writing her book, which addresses the despair and fury of young working-class adults whose “options and choices are very, very limited. I don’t think people realise just how cut off and shut down those opportunities are. Most of the properties that were bought under right to buy came back on the market as private rented, and now we’re seeing the fallout.”

The history of right to buy is longer than most of us realise – Thatcher was merely the ideal salesperson for it. She capitalised on the decent incomes and thwarted consumer aspirations of many working-class people at the turn of the 70s and 80s. In fact, the earliest legislation on council housing, from the late 19th century, required local authorities to sell the housing they built within 10 years.

From 1936, the minister of health could authorise councils to sell houses to individual tenants, a practice that stopped abruptly – though temporarily – when Labour was elected immediately after the war, putting Aneurin Bevan in charge of health and housing. Bevan imagined the building of excellent-quality council housing not only as essential to narrowing inequalities in public health, but as a way of forging a society where class mattered less. He pushed forward a programme of building large, several-bedroomed council houses with gardens to be rented by middle-class as well as working-class people, and not to “be sold to others merely because they have the money to buy them”.

Conservative MPs didn’t like this one bit. The Oxford historian Aled Davies has documented how in 1947, David Gammans, the MP for Hornsey, north London, pressurised Bevan to allow the local council to sell its houses to sitting tenants. When Bevan refused, Gammans accused him of “turning the British people into a race of propertyless proletarians”, declaring that every citizen ought to have “the unchallengeable right to buy his own house”.

Gammans was in luck. Labour lost the 1951 election, partly because Bevan was perceived to have been too slow to address the massive need for new housing after the war. (For his part, Bevan believed: “While we shall be judged for a year or two by the number of houses we build … we shall be judged in 10 years’ time by the type of houses we build.”) Throughout the 1950s, the Tories built plenty of council housing, but much of it in the form of flats and smaller houses, while the sale of more desirable council homes, usually inhabited by better-off tenants, recommenced on the quiet and grew in pace.

Bevan conceived of, and defended, council housing as a source of collective pride and a world-class public resource, just like his most celebrated creation, the NHS. Harold Macmillan, his successor as minister for housing, and later the Tory prime minister, was happy to build council housing as long as the goal of “a property-owning democracy” was maintained. Renting from the council wasn’t a lifelong state, merely a stepping stone to owner-occupation – and, ultimately, that’s the way it has stayed.

“A lot of Labour advisers (in the 1970s) were very, very frustrated because they knew if they didn’t do it, the Tory party would walk in and do it,” the author Andy Beckett told me in 2017 on Streets Apart, a BBC radio series tracing the history of social housing. Covertly, said Beckett, “it appealed to [Thatcher’s] idea of the respectable working class”.

The right to buy didn’t benefit all council tenants. “It was particularly attuned to the needs of wealthier, often skilled, working-class, older voters and those were the kinds of people Thatcher wanted to secure as Conservative voters. It wasn’t really a policy for single mothers or the poor because they couldn’t afford to buy and Thatcher was keen to peel off the skilled working class from the Labour party.”

Margaret Thatcher, as leader of the opposition in 1978, handing the deeds of a council house over to its new owners in Balham, south London.
Margaret Thatcher, as leader of the opposition in 1978, handing the deeds of a council house over to its new owners in Balham, south London. Photograph: David Ashdown/Getty Images

In August 1980, Thatcher visited Margaret and James Patterson, the 12,000th tenants to buy their council home under the new legislation, at their house in Harold Hill, east London. In the photos, the PM looks as pleased as they do – suspecting, perhaps, that she was on to a winner. The Pattersons weren’t so lucky. The couple couldn’t afford to keep up the mortgage payments at a time of double-figure interest rates, leading to their divorce – and forcing Margaret to live in a caravan when she had to sell the house.

Labour formally abandoned its opposition to the policy in the mid-1980s, when council-house sales ran at more than 150,000 a year.

Prof Becky Tunstall, a fellow at York University’s Centre for Housing Policy, has spent decades researching the fortunes of 20 council estates in different parts of England – some peripheral, some inner-city.

In 1980, all 20 estates were classed as “hard to let” – that is, people offered homes on them tended to turn them down, whether because of reputation, location, size or a combination of all three. Right to buy had little effect on these estates for decades, says Tunstall. “It wasn’t really until the late 90s that residents in those estates began to take it up.”

That wasn’t so much because the properties had improved, she says, but because the shockingly high unemployment rates on many estates in the 80s had begun to fall, and many, though not all, tenants had money for the first time. And crucially, “the total stock was shrinking. Over the 90s and 00s, [social housing] became more of a precious commodity.” Estates became easier to let because would-be tenants had fewer housing options to choose from.

The economic geographer Brett Christophers, author of The New Enclosure and of Rentier Capitalism, has argued that right to buy is one of the biggest acts of privatisation ever undertaken, transferring £40bn in the last 42 years directly to the Treasury. This money was effectively never seen again, lost in a soup of national debt repayments and tax cuts. It has served as a way of funnelling money and power away from the local authorities which once built and maintained millions of homes.

Boris Johnson with Anne-Marie Trevelyan, Michael Gove and Nadine Dorries in Blackpool, where the prime minister delivered his speech on housing.
Boris Johnson with Anne-Marie Trevelyan, Michael Gove and Nadine Dorries in Blackpool, where the prime minister delivered his speech on housing. Photograph: Oli Scarff/AFP/Getty Images

“Right to buy was very much part and parcel of the defanging of power at the local political level in the UK,” he says. “That’s been a much wider process, the centralisation of power, both temporally and geographically, but it was a very important part of that process, partly because it was implemented in such a way that the housing couldn’t and wouldn’t be replaced. Councils were basically denied the ability to stop it happening.”

The net result is not only that local authorities can do relatively little about their local housing problems without deferring to central government, but that right to buy devalues renting as opposed to owning. “The more that rental housing comes to be seen as something that is not desirable, not worthy, and not part of the ‘normal’ aspirational life,” says Christophers, “the more you pump up the bubble around home ownership. Right to buy is not just a problem of, and in, the rental sector, it’s a problem for housing as a whole.”

Tunstall adds that what’s needed is more good housing with security of tenure, regardless of whether it’s owned or rented. “Now is the time to argue for more housebuilding, as everyone knows the cost of living crisis is not just about pasta. Housing takes a huge chunk out of people’s budgets. Really, housing costs are the cost of living crisis. Now, more than ever, we need to think about housing for everybody.”

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