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More Thatcherism Won’t Fix Housing

Boris Johnson's answer to the problems facing renters is reviving Right to Buy – the very policy that turned millions of public homes into private landlords' assets and birthed our housing crisis in the first place.

British prime minister Margaret Thatcher looking pensive at the Conservative Party Conference in Blackpool. (Hulton Archive / Getty Images)

You know a Tory government’s getting desperate when it reaches for the Right to Buy. Ever since Margaret Thatcher evoked a ‘property owning democracy’ by encouraging council tenants to purchase their homes, her 1980 policy has assumed totemic status. Now, as he stares into the political abyss, Boris Johnson is considering reviving it.

According to press reports, Johnson wants to extend the Right to Buy (RTB) to England’s 2.5 million housing association (HA) tenants. As so often, detail is sketchy, again suggesting the hope of a vote-winning soundbite and another distraction from Partygate, rather than a considered policy. But it appears the plan is to replicate Thatcherism by incentivising HA tenants to become owners, with discounts of up to seventy percent, funded by public money.

Even by current standards, this is a tired re-tread. It was only in 2016 that the Cameron government included extending RTB in the Housing and Planning Act, its flagship legislation mostly sunk by a national, tenant-led movement of opposition. Housing Associations lobbied hard against RTB back then and will certainly do so again. As legally defined private businesses, HAs will be in serious trouble if they’re compelled to sell homes.

The previous attempt to extend RTB stalled partly because of the financial exposure and complexity of HAs, which the government, outrageously, wanted to compensate them for by forcing councils to sell even more homes, before campaign pressure said ‘No’. Sadly—and disgracefully—big HAs are now mitigating their exposure to the risk of RTB by increasingly building homes for the private market, not social rent.

This issue highlights the general chaotic failure of UK housing policy, as well as the ambiguous character of HAs (correctly known as Private Registered Providers). As research by Dr Stewart Smyth shows, the big HAs have become commercially driven conglomerates, so their opposition to RTB is more one of self-interest than principle. While resisting the extension of RTB to their tenants, HAs have asked government to continue funding the £29 billion Help to Buy scheme that subsidises them to build new homes for first time buyers and which the House of Lords recently criticised as wasteful and counter-productive.

But if RTB is extended, HAs are worried they’ll lose assets on a similar scale to local councils, who have seen almost two million truly affordable homes sold. According to Shelter, only five percent of these have been replaced and the charity’s Chief Executive, Polly Neate, correctly describes the idea of renewing RTB as ‘hare brained’ and ‘the opposite of what the country needs’.

Drawing the same conclusions, the Scottish and Welsh governments have ended RTB, but it remains an article of English Tory faith. Selling council homes has generated £28 billion, most of which is kept by central government. As a House of Commons report states, it’s the biggest privatisation on record.

But while it’s had disastrous consequences for those in housing need, RTB has fuelled speculative property investment. Private landlords now own 40% of homes sold through RTB, a far-cry from property owning democracy. This leads to some grotesque situations.

On the council estate I managed for ten years, shared (sometimes overcrowded) households of young renters paid over twice as much to an absentee private landlord as their council tenant neighbours paid the local authority, for an identical home. I’ve encountered numerous cases where councils have had to lease back former council homes, at full market rent, to use as temporary accommodation for homeless families. The excessive rents charged by RTB private landlords contributes to the country’s £25 billion a year Housing Benefit bill.  Nothing exposes the false economies of UK housing policy like Right to Buy.

The socially divisive consequences of RTB also often go unnoticed. Inevitably, it creates winners and losers, while potentially fuelling resentment on estates where tenants see homes their children might live in being sold-off, leaseholders are exposed to the sometimes crippling costs of paying for improvements, and everyone suffers from the loss of community cohesion and inter-personal familiarity resulting from a constant churn of short-term private renters.

However, relaunching RTB may once again show how detached the Johnson government is from the reality of working class people’s lives. The assumption that many HA tenants will be able to afford a mortgage, even with a big discount, is delusional. Research by the National Housing Federation in April 2021 found that almost a third of HA tenants receive Universal Credit—a situation that was worsening even before Covid—and the pandemic may have driven a thirty percent increase in rent arrears, amounting to £1 billion.

But RTB has always been at least as much an ideological and political project as a housing policy. The image of the ‘working class Tory’, from Basildon Man to the Red Wall, has been a persistent and powerful theme in UK politics, with private home ownership often at its cornerstone, based on an assumption that holding a mortgage leads to holding conservative values. This is compounded by the fundamental right-wing hostility towards anything that appears to challenge its deification of the market. In the words of a neoliberal academic in 1998, the aim of government housing policy should be to privatise the entire social rented stock and ‘allow market relations to develop’.

Of course, as with other aspects of Tory philosophy, this is utterly hypocritical and dishonest. Despite the deliberate stigmatisation of social housing tenants and the false argument that their homes are ‘subsidised’, for every £1 spent on non-market rented homes, £14 is paid by government in corporate welfare to the private housing market.

Breaking the ideological hegemony and economic iniquity of private home ownership must be part of any socialist housing policy. Sadly, this is a nettle the Labour Party has mostly failed to grasp. Since the 1980s, very few leading Labour politicians have had the courage to publicly challenge it Right to Buy, even though it has emasculated Labour-run councils and successive party conferences have called for it to be scrapped. There seems little prospect that Keir Starmer will listen to the almost unanimous call of party members—and the public at large—for more investment in homes that aren’t exposed to the whim of private speculation.

Housing is at the heart of the cost-of-living crisis. For millions of people ‘the rent is too damn high’, a direct consequence of calculated government policy to promote private landlordism. Coronavirus, like Grenfell, has magnified the social, ethnic, and gender inequality embedded in the prevailing domination of global capital over housing policy, to the point that it costs working-class lives. The possible extension of RTB will do nothing to change these things, except make them worse. At a time of extreme financial volatility and massive personal indebtedness, nudging people towards buying a home they may not be able to afford risks repeating the folly of sub-prime mortgages and its disastrous consequences.

For the left, the task of formulating, fighting for, and winning a radical housing alternative has never been more urgent. Alongside the health, social, and economic risks, housing is now at the centre of the environmental crisis. The Right to Buy is a relatively small part of those existential threats, but it epitomises an individualised, commodified, market driven approach to housing that could cost us the earth.