2007 - 2022

Cosplay Tories in Housing Debacle

The disinterred remnants of truly terrible social policy was this week re-presented by the Conservative government. Trying valiantly to climb out of the deep hole they’ve dug for themselves – the Thatcherite re-treads are busy casting about for anything that looks like a policy that can be flung out to distract the world from their rolling catastrophe. This week the Tories decided to make the already dire housing situation worse with a fantastically bad suggestion, that people on receipt of benefits to put them towards a mortgage, a regurgitation of Thatcher’s famous Right to Buy policy.

Maggie’s Right to buy created the notion of a ​property owning democracy’ in British political thought and brought Thatcher into power in 1979 through a mass of working-class votes. It was both very popular and famously disastrous draining local authorities of housing stock and setting up millions of people to default on mortgages.

[I realise this is an England-only policy]

While this is red-meat to the tory faithful NEF points out: “the sales of council homes have not been accompanied by investment to replace the social homes lost to right to buy. Rather, investment in new social housing has been consistently slashed since the 1980s, with government investment instead going to paying the housing benefit bill. In addition, right to buy actually disincentivises the building of new social homes. Why would councils pay to build homes, only to sell them at a discount, lose income from future rental payments and not receive the full sale receipt?”

“When homes are sold at a discount under right to buy, this represents a loss to public finances – an estimated £75bn over the lifetime of the policy since 1980. Extending the policy to housing associations will only extend this disincentive to more providers of social housing, slowing social housebuilding when it needs to be sped up. It is estimated that the government may have to compensate housing associations by £14.6bn in a decade if the policy is extended.”

Also, and crucially Simon Hill adds: “the right to buy has added to the declining perception of social housing, furthering stigma. Inherent in the policy is the idea that homeownership is a superior tenure, and that social housing should act as a stepping stone to the aspirational homeownership. With social housing in such short supply, it has become a tenure for the very poorest, as only the wealthiest social tenants can make use of right to buy.”

On the continent this stigma simply doesn’t exist and gives room for large-scale municipal housing, district heating and a massive affordable rental sector. As always, Britain is the exception and it’s an entirely ideological construct.

The idea is that people who are already struggling with the ‘cost if loving crisis’ will have the opportunity to buy their own house. It’s crazy when you actually write it down.

Blundering on Boris announced that to help renters save for a deposit, he would sell more rented homes, so there would be fewer of them, which will make rents cost more, making it harder to save. Got it? Johnson called this a “housing revolution” The New Economics Foundation called it “totally detached from reality”.  Shelter called it “baffling, unworkable and dangerous”

For a scheme as batshit as this there is only one women for the job …

The policy stems from a pathological obsession with ‘ownership’ and an inability to change the housing market by creating affordable houses, intervening in rents and controlling exploitative landlords. This is largely because the political class is the landlord class, the political elite is a property owning class.

The real irony here – as Johnson tries to revive a Thatcherite populism is that Maggie’s ‘right to buy’ policy was such a disaster it drained local authorities of income and housing stock while diverting money to the treasury. Inadvertently the policy was the cause of homelessness and the root of the current housing crisis. You couldn’t make this up.

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  1. Jean Urquhart says:

    What a brilliant interview; Eddie Mair superb, forcing the pensions secretary to explain the mess they are making. Far from being any kind of solution (in England) it will make things much worse (if it ever comes to pass that someone on benefits will think its a brilliant idea). When the Thatcher Gov. sold off the houses to those who wished to buy, and the discounts for those who had lived a lifetime in their council house, even who were strongly against the philosophy of the ‘right to buy’ were offered their homes at such a reduced price that they almost had to buy them (hard not to when buying them meant paying the equivalent of half the rent that you had been paying for 30/40years). However, the income from the sale was never used to build more council houses and worse still, Councils were barred from building any new housing stock. This policy continued under the Blair government and if anything, got worse. The establishment of Housing Associations was another ‘contracted out’ service, relieving councils of any responsibility for housing. How insane was that when the policy had seen the number of homeless increase dramatically. Questions about the Housing Association Boards rejecting applicants for a home remain unanswered. Whaur’s yer democracy too? And the Labour Party then conceived the brilliant bribe to local authorities of clearing their housing debt, IF they managed, through a ballot of their tenants, to achieve a positive vote for transferring their landlord from the council to a housing association. Every Director of Finance in every hard-pressed council must have been praying for a positive vote. Servicing debts of millions, with reducing rent income, meant much less money available for servicing and maintaining the housing stock. From memory, in Highland Council something like 60p in every pound of rent was used to service the housing debt ‘loan’. I remember too, the glossy leaflets, delivered to each tenant at the time of the ballot, headed ‘Want to be Your Own Landlord?’ No came the thundering response.
    I believe, that at the time of Thatcher’s Right to Buy scheme, approximately 70% of folk in Scotland lived in council housing. In England, it was nearer 30%. (These figures are not confirmed but are from the memory of something like twice as many folk renting in Scotland as in England at that time; in council houses.
    There was never any shame in renting your house, at least, not where I lived. Almost everybody I knew lived in a council house and thought nothing of it. I remember complaints about us all having to have the same colour of paint on the front door, but otherwise there were no insurmountable issues. The housing situation is probably now worse than it was before the second world war and our politicians seem to be moribund in taking any action. There are architects who have come up with some really creative thinking around solving the problem, but to no effect. The Scottish Government did put an end to the right to buy and they lifted the ban on councils to allow building of houses, even if it didn’t put money enough into building as many as needed. In many rural areas, especially where tourism is the principal economic driver, homes turned into holiday lets mean we have a situation where businesses are closing, or reducing hours through lack of staff. Although Brexit contributes to the lack of staff of course, locating rented property for staff or anyone who actually wants to live and work in these areas, is now impossible. This has become a bit of a rant. Scotland will suffer as a consequence; the less England spends on housing stock, the amount will reduce via the Barnet Formula to Scotland’s budget. The Tory Housing Policy created the homeless problem and their ‘answer’ is to exacerbate it. As Mike Small says, ‘you couldn’t make it up.’

    1. florian albert says:

      ‘the housing situation is probably worse now than it was before the second world war’

      By what criteria do you reach that conclusion ? Is there more over-crowding ? Are the houses in the 21st century of poorer quality than those of 1939 ?

  2. Tom Ultuous says:

    I know of one person who had his council house rent paid for him all the time he was in it. A couple of month before the Scottish govt revoked right-to-buy he was left money by his mother, bought the flat for 30 odd thousand and was left with a 100K flat. I don’t blame him for doing it but he’ll die soon, leave it to his daughter, she’ll sell it and it will probably be bought by a landlord who’ll rent it out at a much higher rent than the council did.

    You couldn’t really blame anyone for taking advantage of right-to-buy but, make no mistake, everyone else had to pay for their gain. Even those who did gain out of it must often wonder what they gained when they end up having to help their children on to the property ladder or help with their extortionate rent or maybe even have to sell the house to pay for their own old age care. It’s all a Tory Ponzi scheme. They can’t even raise interest rates to a level that will tackle inflation as they’d end up with so many people unable to afford their mortgage it would bring about a housing price crash, possibly even resulting in the banks needing bailed out again. Mass building council houses might have the same effect.

    It’s great that the Scottish govt ended this lunacy but we won’t be able to fund housing projects until we’re independent and have our own borrowing powers.

  3. SleepingDog says:

    The accepted political science interpretation of the legislation: https://en.wikipedia.org/wiki/Housing_Act_1980
    was, if I recall, that the Conservatives were desperate to boost and consolidate their vote, and this was their chosen way of buying a Conservative majority in the House of Commons, not to help an actual majority of people to become homeowners. A cynical bargain to create enough winners and more losers. So in those terms, it seems to have been a success. A self-sustaining demographic obsessed with inheritance (of built property) and possibly dynastic marriages, emulating the ruling elite.

    Yet through contradictions in ideology, policy and practice, did many of these houses move into the hands of speculators and end up in the rental market anyway?

    By the way, it was interesting to hear historian Lucy Worsley (in Ladykillers) describe a female serial killer as the embodiment of the ultimate Victorian, ruthlessly murdering her way through lovers, tenants and children to claw her way up in the world to gain insurance money and a nicer abode. Just took it a little too far for some of the town worthies to countenance, possibly. Would the ultimate Thatcherite be any different, I wonder?

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