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How Margaret Thatcher defined the (housing) nation

I suspect that one of the reasons that Margaret Thatcher’s death had such a profound impact is that many influential media folk are of a certain age. Middle age.

I know, because I’m middle aged too. And because Margaret Thatcher’s first government coincided with our transition to adulthood, it inevitably made a deep impression on us.

Professor Mark Stephens

Professor Mark Stephens

I was studying A level economics as factories closed and unemployed soared. Every Friday, the News at Ten displayed a map of Britain on which lights flashed as the presenter announced the closure of a textile factory in Burnley with a loss of 525 jobs, a printworks in Derby with a loss of 233 jobs. And so it went on, and on until unemployment eventually peaked at 3.3 million. You can gain a flavour of the politics of the period (and the art of parliamentary reporting before cameras were allowed) here.

For me politics was economics, so I ended up studying them both at university with a dash of philosophy thrown in, rather than law as my father wished. Unemployment peaked in 1986 by which time I had been elected to the Presidency of Oxford University Student Union, and I was spending my time informing my members on how to get ‘fair rents’ slapped on their unsuspecting landlords.

For many people of my generation Margaret Thatcher helped to define who we are today.

But did she define the (housing) nation?

Ironically, Margaret Thatcher was cautious about the right to buy.

According an early biographer, the journalist Hugo Young, she hesitated before supporting its inclusion when she was Shadow Environment Secretary on the eve of the October 1974 election.

She was concerned that the discounts would be seen as being unfair by those people who had saved to buy their homes on the open market. “What will they say on my Wates estates?” she worried.

Evidently, she overcame these concerns, and the rest, as they say, is history.

Or is it?

In the Evaluation of English Housing Policy (a review of housing policy from 1976 to 2005 undertaken for the UK Government by a team from Glasgow, Heriot-Watt and Cambridge universities), we concluded that right to buy was one of the most successful policies during the period.

That is it was successful within its own terms. It contributed to the rise in home-ownership from 58 to 70 per cent of households. It contributed to residualisation in the council sector, but we acknowledged that by allowing some people to become home-owners without leaving their community, it may have facilitated some mixing. But by 2005, we felt that the policy had run its course, and it is notable that the limitations introduced by governments after 1997 passed without much fuss, and there has been little enthusiasm about the revamped scheme introduced in England by the Coalition government.

We might have left the assessment of the right to buy there, but for a rather good piece of investigative journalism published one month before the former prime minister’s death.

The Daily Mirror used the Freedom of Information Act to ask selected local authorities how many of the leaseholders in their freehold properties had given ‘away addresses’ for correspondence. This was intended to identify the proportion of ex-council flats that were now owned by private landlords.

The answer from the 13 councils that responded is that almost one-third of ex-council flats are now owned by private landlords.

Of course this does not tell us what the proportion is overall, because council houses would normally have been sold freehold. Nonetheless, it indicates that within its own terms, the right to buy’s success in raising home-ownership levels was rather more ephemeral than was envisaged.

The long-term implications of the large-scale discounted sale of assets owned by the state are with us today.

At 40 per cent, one of the places with the highest proportion of ex-council flats that are now rented privately is the London Borough of Kensington and Chelsea.

This borough also became the iconic example of excessive Housing Benefit payments when the Coalition made its case for introducing caps on private sector claims.

David Cameron argued ‘Are we happy to go on paying housing benefit of £30,000, £40,000, £50,000? Our constituents are working hard to give benefits to other people to live in homes that they can only dream of? I do not think that is fair’.

In her famous 1987 “no such thing as society” interview for Woman’s Own, Margaret Thatcher urged everyone who could to take a job as an alternative to the dole. “If that does not give you a basic standard, you know, there are ways in which we top up the standard. You can get your housing benefit.”

Well that was then.

Three measures introduced by the Thatcher governments – right to buy, private sector rent deregulation and the 1988 Housing Benefit system –combined to create one of the most inflationary elements of public expenditure.

Margaret Thatcher’s governments did define the housing nation.

But there has been plenty of time since then to redefine it and the governments we elected have chosen not to do so.

Mark Stephens, Professor of Public Policy at IHURER, researches topics related to housing policy (UK and international, including China), housing and poverty, housing finance (including mortgage finance, home-owner safety nets and housing allowances) and housing market instability. He has previously written on this blog about his fascination with Post-communist Europe.

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