Thatcher’s right-to-buy scheme has inflicted untold harm to renters today
3 min read
It would take more than a miracle for this government to create a healthy housing market in time for the next election.
Whoever wins will face a crisis that is not easy to fathom a way out of. Right to Buy (RTB) along with ‘Buy to Let’ (BTL) mortgages have created wealth for some at the expense of others. Many social renters and ‘Generation Rent’ are left out of the equation.
Housing has dominated my thinking for much of my life. I was born into the slummiest part of London’s Notting Hill. So slummy that it could not be saved for the middle class colonisation of Notting Hill that over ran the former poor housing stock and transformed it to, among other things, a ‘rom-com’ film set.
In the mid 1970’s the local authority pulled down not just our house, but our street, and the streets around it, replacing it with a large social housing estate.
Ten years ago I visited one of the flats built on my old streets. It was no longer social housing. It had been bought under the Thatcher hatched ‘Right To Buy’(RTB) scheme by a tenant and eventually sold on to a woman who lived in the country, and rented it out .
The woman had used the opportunity that the RTB had thrown up, by buying from a former tenant, and used a ‘Buy To Let’ (BTL) mortgage provided by banks and other mortgage providers. RTB and BTL helped to increase pressure on housing by creating a sure fire way of making money. With 80 per cent of bank activity in the UK given over to the buying and selling of housing one should not be surprised that people jumped at the chance of making money out of property. Why potentially risk your money, and the banks would agree, on new businesses, new technology; or new industries. Just put your money into bricks and mortar.
If Labour triumph at the general election they will have to confront this housing crisis that created wealth for some and walled off others from gaining housing security. With over two million houses removed from the social housing sector between 1980 and 2022, and 45 per cent of renters in the private sector living in a BTL property you can see major problems with the housing economy.
BTL’s only work efficiently when interest rates are low. With landlords tax breaks removed in 2015 and increased interests rates it has become less of an investment attraction. Hence some landlords are leaving BTL’s. This is putting pressure on renters as increasingly they will be asked to pay more and more, reflecting the increased costs of the landlord and the shrinking private rented sector.
There are over a million families who should be in the social rented sector because they cannot afford to rent in a commercial market; largely due to the stripping out of social housing from the social sector by the RTB.
‘Generation Rent’ are unable to buy their way into home ownership because BTL landlords have scooped up many of the houses that would have been available; making housing more expensive and way beyond the grasp of those that want to buy.
My slum has gone and the social housing replacement has not fulfilled the promises it was intended to address. While enriching some the RTB and BTL have done untold harm to the aspirations of those that want to live securely. Decisive action over housing must be top of any government’s in-tray. So far it has not been.
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