It’s not well known that it was Labour that first promised council tenants the Right to Buy. For example, the 1959 Manifesto said that Labour would take over many of the private tenanted properties that were in appalling condition, repair and modernise them and then let them at fair rents. Labour then said that every tenant ‘will have a chance first to buy from the Council the house he lives in’. Labour’s twin housing aims were remarkably balanced and are still fit for 2015: ‘to help people buy their own homes and to ensure an adequate supply of decent houses to let at a fair rent.’
I can’t imagine that High Gaitskell in his worst nightmares would imagine the disaster that the Right to Buy has become 50-odd years later.
Tom Copley AM, Labour’s housing spokesperson on the London Assembly and chair of the London Labour Housing Group, has compiled an astonishing report on the disaster of the right to buy in London. Tom concludes:
‘As a policy, Right to Buy is possibly unrivalled in representing such poor value for money to both taxpayers and local authorities. For taxpayers, they not only funded the initial building of the council home, they then subsidised the substantial discounts offered to tenants and then – once the homes were sold – missed out on the rental income that would have covered the build costs.’
Tom focuses on the evidence he has collected that shows that a minimum of 36% of all homes sold by councils across London are now let by private landlords. Many are let at extremely high market rents to tenants who need support from housing benefit. Tax payers have to pay again. To add insult to injury, some of the homes are let back to councils or housing associations to house homeless households for which the councils have statutory responsibility.
Thatcher’s decision to take most of the money from RTB sales back to the Treasury and to refuse to allow councils to build replacements with the cash received has been a significant contributory factor to the housing shortage. Over 270,000 council houses and flats have been sold in London since 1980.
The boroughs where the highest percentage of the sold stock has ended up being privately rented are: Tower Hamlets (51%), Enfield (50%), Kingston upon Thames (46%), Ealing (41%), Barnet (41%), Barking and Dagenham (41%), and Kensington and Chelsea (40%). The lowest is Brent with 24%.
To bring this disastrous policy outcome under control, Tom suggests a few policy reforms, including:
- Mandatory covenants on all RTB sales to stipulate that the home cannot be privately let.
- Abolition of the current system of discounts.
- Councils should retain an equity stake in all homes sold.
- Councils should have a right not to sell if it is in the community’s interest not to do so.
- Councils should have the right of first refusal when a RTB property comes on the market.
- The Government’s commitment to replace homes sold should be a genuine one-for-one, like-for-like replacement.
You can follow Tom @tomcopley and London Labour Housing Group @lhglondon on Twitter.