Monday, 14 October 2013

Whatever happened to the right to buyers?


The council house sell off was the worst event to befall the UK since the Beeching axe of the railways.
This meme runs virtually unchallenged through politics today. Even the Tories, who once had 
private ownership as the SPQR Eagle atop the standard of their all conquering 1980's legions are less keen to talk about it today.

Mainly, one assumes, as house building has not kept pace with demand. And that the sale of council houses saw the 'profits' ploughed into anything else but more housing. 
That is not a surprise. The idea was not to give tenants a house and then build another one for some else. It was to remove people from state dependency for their property and, as a bonus, turn socialists into capitalists through asset transfers.

Now..The thing that I genuinely do not understand is this. Why has selling the council houses resulted in a national social housing shortage?  Selling the council houses should have had nothing to do with this.

Mrs Q - council child, family of 7, 2nd generation, Irish immigrant family, does not live in the council house her dad bought in 199x. 

He lives in it. With her youngest sister.

If the family had decided against buying that home in 199x, as they very nearly did,  he would still be living in it. Just not as the owner. The net effect of this house sell off on habitation and housing stocks was nil. All that happened was the council no longer had the house, but also no longer had a family to house within it.

So..where does this idea that the sell off was responsible for the housing crisis come from ? If anything, it must have lowered house prices, during the sell off. When cheap homes were being dished out by local authorities at below market value.

Unless all the people who bought their homes subsequently decided to rent them out, or sell them on to the private sector and then moved back into social housing, there should have been no effect on housing at all. The vast majority  of people that bought those houses, still live in them today.  Or their  descendents live in them, which they would have done anyway.

Mrs Q's youngest sister would have an automatic right to that 3 bedroom terrace if the old man passed away through her continuous residence there since her birth. Or, if they had chosen to remain at the family home, one of the other 4 siblings could claim the right to occupancy.
Ma Q- 

The fact the sell off money did not go towards building more social housing is kind of irrelevant. Because if those houses were never sold in the first place, the numbers of people currently living in local authority housing would be higher. 
Isn't it only those who bought, and then died and who's children would have not had any need of social housing, but inherited a house to sell, contributed to the reduction in social housing availability?
And those numbers must surely be relatively small.

 Is not net immigration and a failure to build more housing to accommodate a rising population to blame? The changes in living arrangements, divorce  rates, the rise of single parent families and an increase of around 10 years in UK life expectancy since 1980, really to blame?

So..have I missed something so blindingly obvious that I must remove this post in embarrassment?
And is it that 'the Great British Sell Off is responsible for a lack of current affordable and free housing' is a myth? 


26 comments:

Nick Drew said...

You are of course correct

it is just that Conservatives have become chronically unsure of themselves (just as socialists did in '90s) and are unable to carry the free market torch or make the free market argument (energy policy being just one ghastly example) - look at Help To Buy or whatever that nonsense is called

but in truth the real, principled (doctrinaire) advocates of free markets were always in a minority, even in Thatcher's cabinet

in a former existence I was very active in politics in the '80s / early '90s, and campaigned actively (to the best of my limited influence) against mortgage interest tax relief (MIRAS)

Mrs T, famously, wanted it increased year-on-year (let it never be forgotten she was, errr, inconsistent)

it was only with the greatest difficulty that Lawson (who'd have scrapped it entirely given half a chance) managed to get it onto a downward trajectory

when I asked so-called 'dries' like Howe, Lawson, Lilley, Moore et al why they couldn't get an overwhelming majority in Cabinet for the free-market approach, they shook their heads sadly and changed the subject

the only man willing to oppose MIRAS consistently was the rather splendid John Biffen

so - needn't expect any principled defence of free-market housing policy from the current shower

Timbo614 said...

I don't think you have missed anything fundamental except that now nobody can afford the private houses that might have been or be built. Hence the new reliance on social housing.

"Living Wage" Nets you about 14K a year (single earner) say times 4(lets be generous) = a house for 56K.

Where are these houses available where there is also local work that you can travel to cheaply (that rules out trains) and without a car?

Electro-Kevin said...

13 years of Nu Labour then a left-leaning coalition followed the government that gave us council house sell offs. That went well then !

Not many people on the streets despite mass immigration. Are we sure it's a shortage that is the problem ?

Social housing has not gone away. It is more expensive than ever in the form of dole-to-landlord subsidy - much of it for migrant workers shipped in (subsidised by the taxpayer)to take the place of workers who would have stayed put if there was state subsidised housing for lowly local workers.

I bet what we have now is more of a tax burden than what we had then.

Electro-Kevin said...

...and a darn sight more Labour voters being shipped into the country too !

CityUnslicker said...

Agree BQ. The issue is we lack houses, need 250k a year, build 100k. This has not changed for over 15 years. Plus immigration, equals huge house price inflation.

However, IF the HA's had built more houses with the proceeds, it would have helped. instead they spent the money on other services. For some odd reason, aluuded to by ND, the Tories don't defend themselves. Capital appreciation was turned into day to day spending by the Councils - that is the real tradegy.

The other tradegy is the NIMBYISM across the Country that stops more dwellings being built. And the ones that do are smaller. What you now get for your money public or private is tiny. I live in what bythe standards of my parents generation is a tiny box - but in reality I spend/have spent the same level on income on housing provision, it just no longer goes so far. Conversions of houeses to flats have taken up much of the slack of new build development needs.

andrew said...

"Unless all the people who bought their homes subsequently decided to rent them out, or sell them on to the private sector and then moved back into social housing, there should have been no effect on housing at all."

correct to

"Unless all the people who bought their homes subsequently decided to knock them down... "

Bill Quango MP said...

Its a curiosity.
As CU and others point out we know why there is a current shortage of social housing.

If you listen to the Owen Jones types it appears that the people who purchased their own council houses in the 1980's had somehow never lived in them...despite that being a prerequisite for the discount.

Even wiki has..The effect was to reduce the council housing stock, especially in areas where property prices were high such as London and the south-east of England.

And that's it. No mention of also reducing the number of council house tenants by the same or an even greater number.

Blue Eyes said...

Interesting apparent fact seen on Twitter: social housing hit its low in 2003. Not in 1983, not in 1990, not under the evil Fatcher who snatched the milk then knocked down all the housing as popular opinion would have it. 2003. 2003. 2003 for goodness sake!

Anyway.

I recently had supper with some of my mum's friends who are well-heeled late middle-aged types. They naturally asked about my housing situation. I mumbled that I had bought an ex-RTB flat and that I absolutely LOVE it.

"Well, that's exactly what the scheme was for, wasn't it? To give people the stepping stone who wouldn't otherwise have been able to afford it?".

It is exactly as BQ says: it switched people from being dependents to property-owners; it broke up the sink estates and turned them back into the mixed communities they were originally planned to be; it gave ordinary earners a chance at home ownership.

And the best part is that it was not a one off windfall for the people who were lucky enough to live in the council flats in the 80s and 90s: my flat, in bubbly inner London, would go about 25% to 40% less than an equivalent flat in a house conversion or private block. So when I eventually sell it, someone else will get the benefit of the stepping-stone. Just as I did.

The housing crisis in London is caused by the collective failure of the post-Betjemen generation to build anything. As soon as those conservationists stopped the motorway box house-building basically stopped in London.

It is only getting going again now, 40 years later.

THAT is the crying shame.

Steven_L said...

I'm not sure the tories can milk RTB for votes. They could:

1) Change the housing laws
2) Grant themselves loads of planing permission
3) Buy up a load of green field land
4) Build a few million nice homes for no more than £100k each and rent them out for £400pcm
5) Sell them to the tenants for £65k each

Thats's pretty much what the tories and labour did for my parents generation. They won't do it. Labour will make some promises designed to sound good but not do anything either.

In a 'free' housing market planning permission would be sold by auction and to hell with the NIMBY's.

I think I've found the best solution, the gf's ex husband paid for it when she divorced him.

Demetrius said...

It is intriguing to wend one's way around streets in the 19th Century Census Returns. A family connection took me to Lowndes Square in London, as posh at it gets and the numbers in each of them, with rare exceptions were a lot more than I suspect those of today. As you go down the class structure the pattern is the same. There are not just the factors you mention, it is the simple business that we expect to live in properties with far fewer people in them today.

Electro-Kevin said...

Blue - I hold with your view that council housing makes excellent accommodation. I used to own and live in one.

Doesn't the fact that the post Betjemen failings 40 years ago have only started to show in the last ten years tell you something ?

That the demand for housing was not expected and nor was it forecast. This is a very recent change and there was nothing in the demographics to tell us that it was going to happen.

If it had been obvious then very many more of us would have bought second homes when we could and got on to buy-to-let.

I bet few of the economic sages who read/write these pages had a go at btl prior to the property ramping TV shows appeared.

Here's an interesting fact. In 1997 little bro' bought his first two-bed house in Shirley (Croydon) on his own on a salary of £18k pa. 16 years later (in the same job)he would need 4 colleagues to join him in order to do the same.

Both wage depression and house inflation have changed radically in the time since.

Something else must have happened other than a shortage of building, surely ?

Graeme said...

Thee seems to be something odd happening. According to a Mark W post - http://markwadsworth.blogspot.co.uk/search/label/Construction - there is mathematically enough housing in the UK for the population, unless millions of houses have been demolished and not replaced. Are the homes in the right places? My guess is that council taxes, low interest rates (I remember paying 10% plus on my first mortgage back in the day), and property speculation are the key factors. Has ownership of housing become a major industry (with impacts on house prices) rather than the cottage industry it used to be?

Graeme said...

link should have been:
http://markwadsworth.blogspot.co.uk/2013/10/but-is-it-really-supply-stupid.html

Bill Quango MP said...

That's interesting Graeme. i think we suspected that the number of houses isn't the issue. What use is a house in an old mining town or a former industrial centre?

In my 2nd home area, village housing is about 20% dearer than in the surrounding areas solely because its picturesque and has decent road, but zero rail links.

Anyone could save 20% by moving five miles along the road.

EK-BE ; The ex-LA flat I bought in 1991 for £57,000 is now £300,000.


And it was cheaper than many, despite being larger and superbly placed, on account of the lousy, drug dealing, noisy maniacs that lived in the block that I know you both know all about.
It was a starter property. Still is.

I liked it. But I don't miss it.
And I envied my maisonette owning friends. Their quiet,spacious, private, nicer location, above shops that were closed at night, pleasant properties caused a jealousy that our 'art deco period features' couldn't remove.

Blue Eyes said...

EK - the surprise was that London's declined suddenly reversed after the economy became more dynamic post the 80s and 90s reforms.

BQ - sure I'd like to be able to afford somewhere smarter, but I can't and my "rent" is quite cheap in the meantime. Especially when I get a lodger in. I could not live this centrally in the privately-built sector - even if renting. Yes there is a cost in occasionally finding people skinning up in the stairwell and people caring less about their own environment but overall I am happy with it.

And cash buyers: the yields on flats like mine are to die for. You could buy my flat for circa £250k and rent it for £1300. You do the math.

Electro-Kevin said...

Blue - '...the economy became more dynamic...'

House prices have outstripped the wages of the vast majority of earners and we now talk of housing 'crisis'.

Why hasn't the 'dynamism' of the economy translated into people being able to afford more house rather than less than their parents ?

Graeme said...

if there are enough houses/homes...then it is because something is bidding up the prices. QE? Low interest rates? The fact that more people see owning houses as a business rather than just as a hobby.... I cannot believe that it is due to foreigners wanting to own houses/flats in Finchley or Clapham. But maybe an investment trust or OEIC has found a niche here?

Anonymous said...

"The other tragedy is the NIMBYISM across the Country that stops more dwellings being built."

a) England is the most crowded country in the EU - and our countryside is rather beautiful.

b) we only grow half our food. A month ago I saw big housing developments in the Vale of Evesham - on some of the best growing land in the world. Is this sensible if you think of the future?

c) "The population of England and Wales has grown by 3.7 million in the 10 years since the last census, rising from 52.4 million in 2001, an increase of 7.1 per cent. This was the largest growth in the population in England and Wales in any 10-year period since census taking began, in 1801. It compares with a rise in population of 1.6 million between 1991 and 2001."

d) and with an unknown number of illegals - don't Tesco think the true UK population's 80 million?

Don't c) and d) account for the shortage without invoking NIMBYs? Plenty of housebuilding in Gloucester - it's expanded hugely to west and south over the last 20 years. Cheltenham and Cirencester too - and Swindon's not getting any smaller.

Bill Quango MP said...

The true number of UK population must be higher than we are officially told. Doubt its 80 million though.

We should build more homes. But in the village I described earlier 2 housing developments of 50 and 100 houses are being opposed right up to the high court.

Not just nimbyism - the CC cant explain where the extra kids go to school or where parking will be made available or what work is available for people to do?

The current government plans, which are the old labour parties plans , is just to add 20% more housing to every town and village in the land and hope all the other stuff will sort itself out.

Anonymous said...

I don't think there is a housing shortage, there is just a shortage of affordable houses that people actually want, flats flat flats, potty little houses with no gardens, no shortage of those.

Why that pushes up the price of what people don't want I don't understand, why does my flat that sold for 20-30k in 1980 now go for 150k that's 8x the average wage.


*the CC cant explain where the extra kids go to school or where parking will be made available or what work is available for people to do?*

I can't understand why this kind of stuff ever crept into the system, if we had applied this hundreds of years ago, many towns wouldn't even exist, a thousand years ago many places would have been a house in a field.

I can understand the point of it, but it is always consistently abused to the point that only crammed in developments in the arse end of crap towns are built. It's like "traffic concerns", is there any development, anywhere, that isn't opposed with this excuse?

The ruddy wolf center near exmore was opposed for this reason, it's a bloody dying tourist/holiday area, and they are fighting something on traffic grounds (8 visitors allowed per day), sigh.....

**** nimbys with a rusty pole

Bill Quango MP said...

Anon - Ah, but the point still stands.
There is no room for more car parking spaces. None at all.
There is not a shortage of spaces..there are loads. but they are not in the centre, so people don't use them, and park all over the place. to the point where a traffic warden now comes. In the seven years that i lived here i parked in a limited waiting zone of 1 hour, all day. And never had a ticket as no warden ever came.

2500 people live in village. That is a 500 increase in 10 years. Not too much of a problem. But the land is used. The recent new medical centre is great. But its out of the town centre and shops have closed as a direct result of the morning pensioners driving to the doctors, then going elsewhere as they have already driven out of the centre.
So the centre erodes, and development moves on elsewhere.

The CC says - children will be bussed to the school. These are primary school children. 4-8 years old.
Who wants that? Those with two children of different ages must send them to different schools in different directions.

I think these two,of many that can be added, are perfectly valid. Planners should not make problems. They should solve them.

Now, a previous development was opposed on the disability grounds. it was over 1000m from the centre of the town.
A ludicrous challenge I thought as it was actually 1300m from centre.So what's the fuss. Pavements aren't overflowwing with people as it is.

Yet that is the government's own guidelines. they come up with this crap. So many houses/acre. So many parking spaces/dwelling. This many mobility scooters / hour on a pavement.

I don't agree with just building and hoping. Storing up other problems for tomorrow.

{ - if the Cc said - yes, a new school will be built at X. And - yes - we will double story our car park at y - the objections fade. Rightly so, as the problems have been resolved.
but instead you get - look -its your problem. We just want the money from the developer..you deal deal with the fallout...And there won't be that much more crime will there? or that much more traffic? Just live with it..

and then they wonder why people object.

Mark Wadsworth said...

Steven_L, excellent point.

Although BQ's original point about his father-in-law is perfectly valid, the rest of what I read here is complete and utter gobbledygook bereft of any logic or coherence.

My response is in the second half of this post.

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