Why the Right to Buy policy was so successful

How do you judge whether a policy has worked or not? Obviously, this is an important question, but the answer is by no mean clear cut. The reason I say this is because in my new book, Housing Policy Transformed: the Right to Buy and the Desire to Own, I argue that the most successful piece of public policy since the Second World War is the Right to Buy (RTB), which allowed social tenants to buy their dwelling at a considerable discount. Yet the RTB must be one of the most hated policies ever enacted. It is accused of causing a massive increase in homelessness, the residualisation of social housing and helped to create the apparently fatal fetishisation of owner occupation that led to the crash in the housing market in 2007.

So how can we claim that the RTB was so successful? The complaints about the RTB are all concerned with the effects of the policy on other issues rather than the policy itself. But if you look at the explicit aims of policy as set out in 1978 it is clear that the RTB achieved exactly what it was set up do. The Conservatives had two purposes: first, to extend owner occupation more widely amongst working class households, and second, to diminish the influence of local authorities over rented housing.

So when we consider that 2.5 million households bought their dwelling and local authorities now own less than 2 million dwellings instead of the 6 million in 1979 we must conclude that the RTB worked spectacularly well. The policy achieved precisely what the government intended it to.

So why is this not recognised in the literature? The reason is that virtually all the discussion on the RTB is conducted on the basis of the integrity of social housing. Quite simply, most academics and commentators see that social housing is a more legitimate tenure than owner occupation. Social housing is taken as the normal tenure around which the others ought to be judged. Therefore, what happens to social housing is all that matters.

Yet clearly this view is absurd when we consider the manner in which governments have to operate within the real world, where a majority of households are owner occupiers and a significant part of the minority aspire to it. Political parties, if they wish to get elected, have to respond to the aspirations of their populations, and this means that owner occupier will always be seen as more important than social housing.

Peter King
Centre for Comparative Housing Policy, Department of Public Policy, De Montfort University
Housing policy transformed: The right to buy and the desire to own is now available with 25% discount.
Peter King was interviewed for the article ’30 years on, the right to buy revolution that still divides Britain’s housing estates’ in The Observer, click here to read more.

3 Responses to “Why the Right to Buy policy was so successful”


  1. 1 Dr Derek Hawes January 14, 2010 at 4:36 pm

    Whilst I agree with the thrust of the author’s analysis. it is important to recognise that the Right to Buy “policy” was, in fact only half a policy. The other half would have been to use the capital receipts received to increase the supply of the rented stock and to upgrade the worst of the existing rented, unsold stock.

    Also, with hindsight, it is clear that the levels of discount (up to 70%) were far too generous, and if much smaller levels had been established, the aim of transferring wealth to social tenants would still have been achieved. It was also a mistake to include flatted properties before first establishing a fair way to cope with heavy capitalised service charges. This issue is still causing hardship in many areas.

    It should be remembered that Ted Heath had, much earlier, experimented with RTB, offering the new town development corporations the possibility of offering discounts of (I think) about 3% or 5% which went some way to establish a better balance between owners and tenants in new town which had become virtually 90% tenanted by the late 1970s.

    The other element to this argument is that many large Borough landlords, with stocks of between 25000 and 75000, often poorly built, over dense estates, were among the worst, most incompetent landlords, forced into system built, experimental construction, much of which was disastrous and accelerated the “residualisation” about which a lot of heat has been generated in the interim.

    Dr Derek Hawes
    (ex-University of Bristol)

    • 2 Peter King January 15, 2010 at 1:23 pm

      Derek,

      Many thanks for your comments. I agree with you regarding the use of receipts, but this was overtaken by a wider concerns for public spending and controlling local authority activity. On discounts, one idea, by Peter walker, I believe, was to give the properties away. Mrs Thatcher apparently saw this a potentially offensive to ‘our people’. You may well be right on the discounts being too generous, but I feel that once the policy was initiated the Tories were determined that it would succeed and large discounts made this more likely. On your last point, I do believe that the RTB is being used as a scapegoat for many other faults and problems with social housing.

      Peter

  2. 3 Kieran April 16, 2010 at 11:42 am

    Margaret Thatcher’s divisive policies are surely a cause of many of today’s social problems. The major focus on individuality rather than society was flawed from the outset. Unadulterated free market policies have also caused many at the bottom untold pain and hardship.

    The consequences of residualisation were comprehensive via the reduction in stock. A ghettoisation effect thus emerged that can be viewed through the lens of many disadvantaged and excluded estates which you – my friends – are probably unlikely or unwilling to set foot in it for obvious and elitist reasons.


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