The housing problem in the UK has become so pervasive that it can sometimes seem natural and eternal, the ever-present background to British life. But it’s important to remember that specific political projects and policy choices brought about the housing crisis – and continue to maintain it.
A new report from the thinktank Common Wealth tallies up some of the continuing costs of one of the culprits: the right to buy, Margaret Thatcher’s signature social policy. It demonstrates that the right to buy has amounted to a massive giveaway of public resources, and one of the largest privatisations in British history.
Focused on England, the report’s figures show the enormous scale of the public assets that local government was forced to give away. Since the policy’s introduction in 1980, 1.9m English council homes were sold at an average discount of 44% of market value. Common Wealth calculates that the discount resulted in councils giving up £194bn in equity. More than 40% of the homes sold under the right to buy are now privately rented.
The history of the right to buy illuminates the political logic underlying it. Thatcher didn’t invent the idea – councils had been able to sell the public housing they owned to their tenants on a discretionary basis since 1936. But it was the Thatcher government that made it central to its strategy and brand.
The 1980 Housing Act systematised and expanded the existing procedures for selling council houses to tenants. It obliged councils to allow discounted sales and required them to offer deposit-free mortgages to facilitate these sales. Local authorities were allowed to keep half of the proceeds from right-to-buy sales but were in effect prevented from spending it on replacing lost public housing.
The right to buy managed at once to satisfy a number of rightwing political constituencies. Traditional conservatives favoured it as a way to expand owner-occupation. Neoliberals saw it as an opportunity to foster the entrepreneurial spirit and push back against municipal socialism. Above all, the right to buy was intended to encapsulate the Tory ideal of a property-owning democracy, which dated from the 1920s but featured prominently in the 1979 Conservative manifesto.
There’s no question that many households benefited from the policy, which remains broadly popular. But uptake has been very uneven, disproportionately benefiting more affluent tenants living in more valuable locations and housing types.
More serious has been the impact of the right to buy on the housing system as a whole. Its goal was to undermine public housing and lessen its role in British life. And in this, it has unfortunately been successful. The policy drove a structural shift in British housing tenure. Before the policy was enacted, social housing of all types made up 31% of overall housing tenure in England. Today it is 16%. As a result, council housing waiting lists and homelessness have surged.
In addition to its impact on existing housing, the right to buy also made building new council housing less viable. As one council officer put it: “It makes us all more cautious about growing our stock.” If councils must sell at a discount any social housing units they build, then doing so becomes a risky venture.
Rules about spending right-to-buy proceeds have been tweaked, but they still restrict the construction of new public housing. One council has calculated that it would need to sell six homes through the right to buy to generate enough funding to build one new home. The policy amounts to, in the report’s words, a “decision to de facto ban new social housebuilding”.
To be sure, the issue is not just the right to buy, but the whole suite of housing policies that accompanied it. This included the deregulation of housing finance, the creation of the buy-to-let mortgage market and other support for landlordism and private home ownership. Through stock transfers, estate regeneration and other mechanisms, this housing policy trajectory has been upheld by Labour governments as well as the Tories. But the right to buy set the initial direction.
In addition to its quantitative impacts, the policy had long-lasting ideological and political effects. For one, it strengthened the ideology of home ownership. It equated owner-occupation with independence, ambition and success while stigmatising and denigrating households that did not own property. Just as significantly, it helped sever the link between housing and social citizenship. The British state never fully institutionalised a right to housing, but for a few decades in the 20th century, public housebuilding was a sign of successful governance for both major parties.
Today, it is clear that the property-owning democracy was a mirage. Social housing and owner-occupation are on the backfoot. Private landlordism and elite multiple property ownership are expanding. Rents and house prices are rising. The result is a housing crisis, precarity and inequality.
Thatcher’s motto that “there is no alternative” was never an empirical claim so much as a normative ambition. The right to buy has been an exercise in trying to make this ambition a reality in the housing sphere, by eliminating existing alternatives to the private housing market.
Critics have been calling for the policy’s abolition since it was introduced. The policy was already scrapped in 2016 in Scotland and 2019 in Wales. Shelter estimates that fully suspending the right to buy would save on average more than 10,000 social homes a year. If the right to buy council housing were to be eliminated, a social tenants’ deposit scheme or other offsetting policies could be established to compensate tenants without undercutting social housing as a whole.
If Britain’s housing problem is ever going to be solved, it will require fully ending the right to buy. But that alone is insufficient. The way out of the housing impasse is by privileging occupancy over property rights, flattening the tenure hierarchy, expanding social housing and building other decommodified housing alternatives. Resolving the housing crisis depends upon reversing and replacing the changes to the British housing system and society that the right to buy helped to bring about.