Wrong To Buy - our worst ever housing policy

What a waste.

Islington council announced in recent days that it will buy back 310 ex-council houses this winter, to add to the 140 or so it bought back in the summer. 

Together these buy-back programmes will cost a cool £187m of funding - some of the cost being borne by the council itself, some from the Department of Levelling Up, Housing and Communities.

But this isn’t the story of waste you might be expecting.

It may be Islington but on this occasion it most definitely isn’t a tale of a woke local authority or London trendiness - the waste is because those council homes shouldn’t have been sold off to begin with.

In October 1980 Right To Buy was implemented and now, almost half a century later, we in England are still paying dearly for it. And not just in cash terms, as Islington Council is finding out, but through seeing growing homelessness which has roots directly related to the four-decade sale of public housing at a snip - part of a doctrine that most of the UK has long ditched but which still prevails in England.

Right To Buy is generally attributed to Margaret Thatcher - she popularised it and incentivised it in 1980, although a small number of sales had gone on before that time when ministers and councils agreed on selective disposals. And it was indeed Thatcher whose narrow vision of a property-owning democracy meant the end of council housing as a safety net for the poor.

But let’s not forget the role that David Cameron played when in 2012 he increased the discounts given to RTB purchasers, and in 2016 when he part-extended the right to buy to housing associations - a move seen by some as a desperate bid to keep some Tory party critics onside, in much the same way as his ill-fated call for an In-Out EU Referendum was meant to do the same thing.

Boris Johnson pledged to make the extension to housing associations much more effective but, perhaps thankfully, this pledge was lost in the noise of his high-decibel premiership.

This is not a party political point - the Blair and Brown governments continued the RTB policy, albeit with reduced discounts - but it is undoubtedly true that Right To Buy is closely identified with the right wing.

So what has been the effect of it between 1980 and 2023?

The Office for National Statistics says 2,006,690 social housing dwellings have been sold through Right to Buy schemes from April 1980 to March 2022. And even in 2021-22 - after the ‘best’ council houses had been sold and re-sold - some 14,006 sales of social housing were made.

But Thatcher’s twist in the tail was her insistence - maintained by successive governments for decades - that while half the proceeds of RTB went to the councils which lost the houses in question, that money could rarely be used to build replacement stock.

Social housing construction has, as is widely recognised, tanked over recent decades.

Official figures show that while around 628,000 social homes were built between 1980 and 1985 - the first five years of RTB - that rate of construction then fell sharply, and remains pitifully low compared to the sales rate.

As a direct consequence the private rental sector has boomed in the absence of council house building programmes of any significance. A House of Lords Library document says that the number of UK households in the private rented sector increased by 63 per cent between 2007 and 2017 - and as an industry we are aware that it has grown further since then, at least until recent large scale sell-offs.

And so in the present day we have a universally-recognised shortfall of supply with government pledges to build 300,000 homes a year scuppered by backbench rebellion on the government side. We have a private rental sector effectively subsiding social housing need, but with brickbats being thrown at it by government.

What a mess

Which takes us back to Islington council’s initiative, which would be laughable if not so sad. The council (that is, council tax-payers) will now pay many multiples of the original sale price of these homes, to buy them back at 2023 market rates.

A spokesperson for Islington says: “Every council home we buy back or build is another home where people can thrive … They will mean more people benefit from good quality temporary accommodation in Islington when they need it most. I’m proud that we are leading the way with our buy-backs programme and also doing everything we can to increase the amount of council homes in the borough.” 

Bravo Islington - it’s a solution, of sorts, and on a very tiny scale.

But what a condemnation of our political class, over generations, that we have found ourselves in this position.

*Editor of Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn *