The UK’s under-siege Prime Minister Boris Johnson is currently attempting to polish his extremely grubby conservative credentials by expanding England’s Right To Buy program to residents of the region’s housing associations — private non-profit entities that own rent-geared-to income housing and rent it out to low income citizens.
Right To Buy in the United Kingdom was a stroke of neoliberal ‘small government’ genius by one of its political pioneers, Margaret Thatcher. The program subsidized the opportunity of low income council housing tenants to ‘climb on the property ladder’ by buying their publicly owned home at an extraordinary discount. Ownership would mean that new owners might actually have lower mortgage payments than what they might otherwise have been required to pay in rent (at least in times of low interest rates).
Always absent from this sunny financial promise is the burden faced by all housing owners — the upkeep costs of a privately owned dwelling. This may have driven Right to Buy owners to sell the property they had been able to purchase far below market rates. Sales of right-to-buy homes, for whatever reason, has often brought windfall profits to their owners.
The unintended consequence: 797,000 units of now desperately-needed publicly-owned rental housing is now in the hands of private landlords who rent it out at ever increasing rates on the private market1.
Scotland and Wales have abandoned Right to Buy programs as a shocking waste of truly affordable housing. Of all the truly affordable homes sold through Right to Buy, only 5% has ever been replaced. The number of people who qualify for a public housing home keeps growing: households that qualify are waiting more and more years to move in. England, however, soldiers on attempting to wash its hands as much as possible from public responsibility for housing.
Is the questionable benefit of Right to Buy exportable to other countries? Neoliberal small government thought continues to hold sway in countries such as the U.S., Canada, Australia, and New Zealand. However, the concept of Right to Buy does not fit well with massive public housing high rise buildings that are owned/managed by a single entity — the state.
But times are changing, with mixed income housing schemes including both private owners and public/non-profit owners sharing the collective management of large buildings. The public/non-profit apartments within such buildings could indeed be dangled to the renter occupants for purchase at a discount. And indeed, there are governments that continue to feel they have a public responsibility to ensure water, sewage, garbage collection, etc. to citizens, but believe housing is an individual responsibility.
So the danger (or benefit, depending on your point of view) of a Right to Buy program may be worthy of consideration beyond England.
What are the pitfalls of extending Right to Buy to non-profit corporations in England, should they ever be persuaded to cooperate? And how attractive would such a program be to prospective housing ‘ladder-climbers’ particularly in a time of post-pandemic inflation and increasing interest rates that will make mortgages more expensive?
Two articles from The Guardian explore the current Right To Buy waterfront in England, together with prospects for its success: How does right to buy work and why is Boris Johnson planning to extend it? and Boris Johnson is unlikely to match Thatcher’s ‘right to buy’ revolution
For History Buffs, there follows an archival article (the name of the current prime minister is a give-away) that provides some history of Right to Buy, which surprisingly dates back many decades and did not actually originate, as most believe, with Margaret Thatcher. Read more in The Guardian: The right to buy: the housing crisis that Thatcher built
Two further articles explore the unintended consequences of the Right to Buy program: In The Guardian: Four in 10 right-to-buy homes are now owned by private landlords and, in the Daily Mail: Landlord who’s made £4.5 million from renting out former council properties admits local authorities SHOULDN’T allow investors like him to clean up while a million people are waiting for homes’
Finally, following a landslide of critical articles commenting on Johnson’s announcement, here is one that is positive. It rather clearly hints how the greatest profits will be made by the Right to Buy scheme. Read more in the Evening Standard: Housing association right-to-buy proposals welcomed by lenders
