Alan Murie and Christopher Watson
The Housing Act 1980 and the Tenants’ Rights etc. (Scotland) Act 1980 mark a watershed in housing policy. In the aftermath of the First World War and the slogan ‘Homes fit for heroes to live in’ the introduction of exchequer subsidy for new housebuilding in 1919 resulted in sixty years of steady growth of council housing. Council housing, along with the expansion of home ownership, had transformed the condition of and access to good quality housing. By the late 1970s some 1 in 3 households were council tenants. But the election of 1979 and the new legislation passed in 1980 saw a change in the long established cross party support for council housing, ended the period of growth in the sector, and heralded a period of deregulation and privatisation.
The Housing Acts operated in the context of reduced public expenditure on housing and introduced the ‘Right to Buy’, the ‘Tenants’ Charter’, a new subsidy system for council housing and changes to the Rent Acts. They led directly to the decline of council housing, rapid growth in home ownership, a new and enlarged role for housing associations, and an eventual revival of private renting following a century of decline.
The Conservative Manifesto at the General Election of 1979 echoed ‘Homes for heroes’ in its emphasis on ‘Homes of our Own’, ‘The Sale of Council Houses’, and ‘Reviving the Private Rented Sector’. While the primacy given to home ownership was not new, the specific policies designed to achieve it marked a break with previous policy and were a challenge to local autonomy.
When the Conservative Party won the 1979 election, they saw their housing policies and the ‘right to buy’ in particular as factors contributing to their electoral success. Throughout the subsequent period the government continued to regard its initial policy stance as an electoral asset. It was also advantageous fiscally – delivering the largest capital receipts of any privatisation programme: though none of the capital could be spent on replacing the council housing that was sold.
The right to buy in 1980 did not introduce the sale of council houses for the first time as discretionary powers enabling sale had always existed. These were replaced in 1980 by a statutory RTB. It applied to almost all secure tenants with three or more years’ tenancy and to almost all properties where the landlord was a council, a new town, or a non-charitable housing association. A statutory procedure for sale was laid down to limit local variation over implementation and the Secretary of State was given very strong powers to monitor and intervene in local administration. Generous sale discounts were introduced, rising from 33% of market value to a maximum of 50% depending on the length of tenancy; and these were further increased under later legislation, to 60% for houses and 70% for flats.
The RTB was highly publicised and made more attractive to tenants because of a related policy to steadily increase council rents. After some initial nervousness on the part of building societies and other lenders, these institutions adopted the RTB with enthusiasm and more than nine out of every ten sales under the scheme were financed with private sector loans. By 1990 some 1.8 million council, new town and housing association dwellings had been sold into owner occupation in Great Britain and sales continued thereafter, making it the most successful privatisation ever. With reduced funding for new council housing the sector went into sharp decline.
The 1980 Act was a game changer not only in its own right but also for the future changes it signalled. Despite many protests, the Act subjugated local government to the will of central government. In this respect, the government’s approach was brazen, unlike the less transparent later attempts at privatisation in health and education.
The decline in the proportion of council housing from 33% in 1980 to 8% today has speeded the residualisation of the sector, moving council housing towards an American-style welfare housing sector, as intended by the Thatcher governments of the 1980s. The decline of council housing has been made more dramatic because of the transfer of a large part of its role to housing associations: in many parts of the country, associations now are more important housing providers than local authorities, further weakening the direct role of local government, especially district councils.
But with the combined housing stock of housing associations and local authorities, we still have a social rented sector in the UK which, at 18% of the stock, remains one of the highest in the world and which would now be difficult for governments of a neo-liberal persuasion to further challenge, especially in today’s situation of housing shortage.
The Labour governments of 1997 to 2010 were criticised by some for their continuation of the policy of council house sales but their encouragement of the further transfer of council housing to other registered providers (ie housing associations) has served to protect the provision of social housing, even if at the same time it has further weakened the direct role of local government. For these reasons, it can be concluded that the long term consequences of the Housing Act 1980 have profoundly changed the role and responsibilities of local government and weakened the position of council housing within the UK housing system. What remains, however, is a tradition of publicly provided not-for-profit housing and an organisational structure which continues to provide an essential alternative to the private housing sector.
Alan Murie and Chris Watson are former Directors of the Centre for Urban and Regional Studies at the University of Birmingham. Alan Murie is Emeritus Professor of Urban and Regional Studies and Chris Watson is Honorary Senior Lecturer. Both are members of the Housing and Communities Research Network in the University’s School of Social Policy.