Triumph or disaster?

That claim will doubtless be seen as controversial and perhaps even offensive. Few housing professionals would accept that the right to buy was a success and most are likely to view it as a disaster. They would point to the decline in social housing, the increase in homelessness, and the residualisation of council estates.

The policy, they would claim, reduced the ability of local authorities to help those in priority need, with the best properties taken away by the most affluent tenants. It subsidised those who did not need support at the expense of the most vulnerable.

But I would argue that the right to buy is the only social housing policy that has popular approval. Second, it has proved to be unrepealable as no political party would
dare withdraw support for owner-occupation. No party is prepared to take the beating Labour took in 1983, when it threatened to repeal the right to buy.

The policy had two main aims – to extend owner occupation to working class households and break the hold of municipal socialism over public housing.

On both counts, it succeeded. More than 2.5 million households bought their homes and the stock of council housing has been reduced to less than a third of its size in 1980. It has transformed housing in Britain and changed the manner in which housing tenures are perceived. Owning one’s home became a practical reality for many working class households for the first time.

The right to buy worked because it recognised human nature and did not seek to change people but to treat them as they actually are. It played on the self-interest of households and their desire to do the best for themselves and their own. The Conservatives recognised that all housing is essentially private and that the idea of housing being ‘social’ is to misunderstand how we live. We wish to exclude those we do not know or like and hold close those we love and care for.

So why is the right to buy opposed? In researching my book Housing Policy Transformed it soon became clear that almost no critics were prepared to take it on its own terms – it is only ever viewed in terms of its impact on social housing. Most critics see its aims as illegitimate and hence it could never be said to have succeeded.

But many of the arguments against are by no means as clear cut as its critics suggest. The argument about the number of dwellings ‘lost’ only applies if one were to see the preservation of social housing as an end in itself. It has had a neutral impact on the national housing stock.

Second, it is argued that the right to buy led to a reduction in available lettings and so increased homelessness. There is something to this argument, but we need to remember that since 1980 homelessness has risen, then fallen and risen again – the fluctuation cannot be entirely due to the right to buy.

Available letting

And we need to remember that absolutely none of the dwellings sold were available for reletting. Indeed, many buyers had lived in the property for more than 25 years and showed they wished to remain by investing their own money in it. It is therefore unlikely that these dwellings would have been vacated if the right to buy had not been introduced. Likewise abolishing it now would not increase available lettings by even one dwelling.

The right to buy is accused of causing the residualisation of social housing by altering the demographics of tenure, leading to high levels of economic dependency. But this too is misleading.

In fact, residualisation was due to the introduction of what in 1972 became housing benefit, which meant that the very poorest could afford council housing and, second, to the shift towards priority need and housing the homeless after 1977. It was these policies that created the economic dependency and lack of diversity that social housing is rightly criticised for.

Of course, some critics argue that those who bought properties only did it for financial gain, and the amount they made from the huge discounts – up to 50 per cent of the property’s value. This was why the Conservatives insisted that the dwellings could not be resold immediately without loss of discount. We also need to remember that many households had been paying rent for more than 25 years and so had already made a considerable contribution to its cost.

The level of support offered in right-to-buy discount is not disproportionate compared to the level of support to households who remain as social tenants. The average discount for England in 2016-17 was £24,970, which is a considerably lower percentage than in earlier years, but similar in money terms to the 1980s. This, we should remember, is a one-off subsidy and they receive no further state assistance, even if their circumstances change.

However, council tenants have received considerable ongoing subsidies. In 2016 the average weekly council rent in England was £57.69 compared to the average private sector rent of £115.55. This means that council tenants are receiving an effective subsidy of £57.86 per week or £3,008.72 annually. But council tenants can effectively obtain a double subsidy. In 2016, 53 per cent of council tenants were in receipt of housing benefit at an average of £51.70 per week or £2,688.40 per annum.

Conceivably, therefore, some council tenants might be in receipt of an effective subsidy of £5,697.12 per annum. Thus a council tenant might receive the same level of the right to buy average discount in 4.3 years (less than the current qualifying period for buying). So current council tenants in receipt of housing benefit enjoy considerable levels of subsidy comparable with those of the right to buy. Unlike households who buy, nothing is expected of housing benefit claimants in return for their subsidies.

During the past few years the numbers exercising the right to buy has declined sharply. But its effects will remain and we should reconcile ourselves to how well the policy worked.

Peter King is reader in social thought at De Monfort University.