Local Authority Housing: A Cautionary Tale

I think this can bear repeating:

The result of the right to buy legislation is the destruction of secure public housing – on of the pillars of the Welfare State.

I believe what happened over the past forty years since the introduction of the right to buy, is that the people who for the first time owned their own home believed that they had somehow become middle class with disposable assets – just that the value was tied up in the home. And they told themselves that as long as house prices increased and affordable mortgages were available, they could trade up when the credit card debt was too high. Of course, in the early years, credit cards were much more restrictive. And the amount one could borrow on a mortgage compared to one’s income was more restrictive. And similarly, the grounds upon which one could remortgage were also more restrictive.

Then credit loosened up, and at the same time holidays on the Costa del Sol and Turkey and wherever made it seem like there was no limit to what one could do. And then the cost of living, mortgages rates, house price crashes, and just poor money management by these babes in the wood resulted in people losing their homes.

The aspiring middle class with ready cash or mortgageable assets could now buy to let and take out mortgages to fund the purchase. Then the Government took away mortgage interest relief on buy to lets. So landlords sold. House prices had risen so much that as often as not the only buyers liquid enough to buy were the true middle class. And so the properties have become concentrated in fewer hands. And as an incentive to landlords, the long term rights of tenants were legislated away, leaving tenants with more anxiety and less will to complain about defects in properties.

Education, housing, and health care, the three pillars of the Welfare State, have been knocked down. We rail against the loss of the NHS, but I think the vision of being safe in a Local Authority house lost its flavour with many people. People wanted to own their own home in the new world of holidays abroad and call centres and Starbucks cafes. What has happened though, in the long arc of this evolution has been to remove Local Authorities housing as one of the three props of the Welfare State, and leave people less able to make ends meet and with nothing beyond their holiday snaps to show for the years they invested.