Councils now sell off more houses than they build. Thatcher’s legacy, right to buy, is a failure | Phineas Harper

Of all the policies imposed on Britain by Conservative governments, few have reshaped the country’s fortunes as enduringly as right to buy. For a lucky few, the policy has meant colossal windfalls and the chance to snap up some of the best properties in the country on the cheap. For the rest, right to buy has meant rising homelessness, spiralling rents and local authorities facing bankruptcy as the social housing stock dwindles, year by year.

In a mere four decades, Margaret Thatcher’s flagship initiative, forcing councils to sell off public housing at huge discounts, has seen two-thirds of British council homes privatised. City halls across the country are now on the brink of insolvency, in large part due to the enormous cost of having to provide temporary accommodation without enough council-owned homes left to go round.

It’s not just historic flats from Britain’s postwar housebuilding boom that are being sold. Brand new council houses are also going under the hammer, almost as fast as they are being built. Design blog Dezeen revealed this month that seven of Norwich’s newest council homes are already in the process of being sold off, fewer than five years after they were completed. Other authorities have also been forced to sell their new council homes, such as Hackney in east London, which has already lost some of the social housing it built in Stoke Newington in 2018.

Despite right to buy being so destructive to public finances that it has been abolished in Scotland and Wales, Labour has announced it will keep Thatcher’s policy if it wins the next general election. This U-turn, backtracking on the party’s previous two manifestos, which promised to suspend sell-offs, has bitterly disappointed many local politicians who are desperate for change.

“Housing is getting worse and worse,” Steve Hilditch from Labour Housing Group tells me. “Council housing should be part of the solution, but because of right to buy and the loss of social homes, it hasn’t been. Social housing is our greatest housing asset, and we’ve been frittering it away.” Leo Pollak, a Labour councillor in Southwark, south London, agrees. “Ask anyone in social housing and they’ll tell you it’s ridiculous,” he says. “Right to buy constantly depletes the country’s social housing stock with each sale. While a perfectly rational choice for the buyer, it makes our housing system even more dysfunctional.”

The shadow housing minister, Matthew Pennycook, has pledged his party will build more social housing to compensate for the homes lost, but it’s hard to see how his numbers will stack up. Even the few local authorities that have been building significant amounts of new social housing in recent years have been forced by right to buy to sell off more homes than they can build.

‘The selling off of Norwich’s brand new, award-winning council homes should be a wake-up call.’ Goldsmith Street social housing in Norwich, Norfolk. Photograph: Tim Crocker

It’s hardly surprising most councils are not building many homes at all, given they are obliged to sell them at a discount almost as soon as the paint is dry. Would you spend hundreds of thousands of pounds building a new house to rent out if your tenants could force you to flog it to them for less than it cost to construct, just three years later? According to research from UCL, right to buy “remains the major disincentive to local authorities building more social rent homes” as the majority of councils rightly fear the policy will impact any new housing developments they undertake.

Instead, many authorities have launched schemes to cling on to as much of their remaining stock as possible. Some offer grants to incentivise council tenants to buy on the open market instead of via right to buy. Wandsworth, in south-west London, for instance, will chip in up to £120,000 towards helping their tenants purchase a home “within the UK or anywhere else in the world”, provided it is not a council property.

Other authorities have created subsidiary companies which can be used to rent out homes while remaining exempt from right to buy. Barking and Dagenham, for instance, launched Be First in 2017, a council-owned company that provides hundreds of social homes, but which, unlike the council itself, cannot be forced to sell off properties that it doesn’t want to.

It is preposterous that local authorities must go to such lengths to protect their housing stock from a rule that would cost the taxpayer nothing to ditch. Absurd, too, is the fact that while private individuals have pocketed fortunes selling on homes they bought through right to buy, councils are forking out precious public funds to buy back the very same properties at far higher prices than they were sold for.

Proponents claim right to buy helps renters make the jump to becoming homeowners. This is true in some cases, but millions of the dwellings sold through the scheme are now in the hands of private landlords who rent them out for more than if they’d remained in public ownership. So while it can point to helping some tenants escape the rent trap, right to buy actually results in more families being locked into higher rents, with fewer rights and insecure contracts.

The real objective behind right to buy is ideological. Like the privatisation of water and rail and 38 other formerly nationalised industries, the 1980s Tory government’s true goal was eroding public ownership. If Thatcher had merely wanted to help Britons buy homes, she could have simply made government grants available to buyers – but instead she created a policy cleverly designed to drain public coffers. Speaking in the House of Commons, her former secretary of state Michael Heseltine made the root agenda of right to buy bluntly clear: “No single piece of legislation has enabled the transfer of so much capital wealth from the state,” he said.

The selling off of Norwich’s brand new, award-winning council homes should be a wake-up call. Trying to solve the UK housing crisis while right to buy remains on the statute books is like trying to fill a bath with the plug out. The policy has not just asset-stripped Britain’s local authorities, pushing them to the brink of destitution, it also makes it impossible to ever rebuild public housing stocks for the long term. It must be abolished.

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