by James Meek
What you think the Thatcherites expected to happen once they’d set Right to Buy in motion depends on how cynical you are about their motives. The most benign view is that they thought supply and demand was a straightforward elastic law, and that the market would take up the slack: private housebuilders would build more homes, for both sale and rent, as the number of new council houses being built waned. A dwindling number of the poorest people would be catered for by residual council stock, by the non-profit housing associations – which would still get state grants to build houses for the less well-off – and, for those who were really hard up, by an obscure welfare top-up called housing benefit.
It didn’t happen that way. One outcome can be seen starkly in a recent online manifesto for self-builders of private homes, A Right to Build. Published in 2011 by Sheffield University’s school of architecture and the London architectural practice 00:/, it was designed as an attack on the dominance of the big seven private housebuilding companies – in descending order of size, Taylor Wimpey, Barratt Homes, Persimmon, Bellway, Redrow, Bovis and Crest Nicholson – who between them have almost 40 per cent of the market in new homes. But the most striking thing in the document is a chart displaying the history of Britain, in housebuilding and house prices, since 1946.
It shows that in the 1980s, as the construction of new council houses shrank to almost nothing, there was a slight rise in the number of private homes being built, peaking at around 200,000 homes a year at the end of the decade. Then it fell back – and stayed fallen. Between the early 1990s and the onset of the financial crisis in 2008, supposedly a boom time in Britain, the number of new private homes built each year didn’t go up. It barely budged from the 150,000 a year mark. The market failed. There was increasing demand without increasing supply. Midboom, as the imbalance between the number of people chasing a house and the supply of new homes reached a tipping point, average house prices took off like a rocket, trebling between Tony Blair’s accession and the 2008 crash. (In Tower Hamlets, prices went up three and a half times.) Even allowing for inflation over that period of time (36 per cent) it’s a terrifying increase.
The chart only shows part of Right to Buy’s drawbacks. Those tenants who didn’t buy their houses, either because they didn’t want to or because they couldn’t afford to, had their rents jacked up. At the same time, because of the growing shortage caused by the inability of councils to build, the failure of private builders to build enough, and weak government support for housing associations, rents in the private sector went up. The poorest and most vulnerable members of society, the sick, the elderly, the unemployed, single mothers and their children, were shared between a shrinking stock of council housing – the council housing least likely to be sold, that is, the worst – and the grottier end of the private rental market.
Much of the rent in both types of tenure had to be covered by housing benefit, and as council houses continued to be sold, the proportion of the poor and disadvantaged claiming housing benefit in expensive privately rented property rose. Many people who bought their council houses sold them on to private landlords, who rented them to people on housing benefit who couldn’t get a council house, at double or triple the levels of council rent.
Right to Buy thus created an astonishing leak of state money – taxpayers’ money, if you like to think of it that way – into the hands of a rentier class. First, the government sold people homes it owned at a huge discount. Then it allowed the original buyers to keep the profit when they sold those homes to a private landlord at market price. Then the government artificially raised market rents by choking off supply – by making it impossible for councils to replace the sold-off houses. Then it paid those artificially high rents to the same private landlords in the form of housing benefit – many times higher than the housing benefit it would have paid had the houses remained in council hands.
In other words, since Thatcher, the British government has done the exact opposite of what it has encouraged households to do: to buy their own homes, rather than renting. Thatcher and her successors have done all they can to sell off the nation’s bricks and mortar, only to be forced to rent it back, at inflated prices, from the people they sold it to. Before Right to Buy, the government spent a pound on building homes for every pound it spent on rent subsidies. Now, for every pound it spends on housing benefit, it puts five pence towards building.
The response of the current government to the housing crisis is to try to make it worse. It is taking steps to increase house prices, without taking steps to increase supply. The coalition’s two most explicit interventions in the housing market have been to restrict supply and raise prices: the first when it cut, by two-thirds, the grant given to housing associations to build new homes, and the second with its mocking parody of Right to Buy, ‘Help to Buy’, offering already well-off people cheap loans to overbid for overpriced houses they couldn’t otherwise afford.
Those who believe the aim of Britain’s private housebuilders is to build as many homes as possible, and that they are only prevented from doing so by a cranky planning system, could say I’m being unfair and point to another coalition intervention. In 2012 the old rules governing what could get built where were replaced with a streamlined model called the National Planning Policy Framework, NPPF, which put the onus on councils to allocate enough land for new houses – including farmland, if necessary – to meet demand five and a quarter years ahead. Councils who don’t comply face, in theory, being overruled on appeal if they try to stop speculative development. But putting aside land for houses isn’t the same as building them. The historical evidence suggests Britain’s private housebuilders have been driven less by the urge to build the maximum number of new homes than by the urge to make as much (or lose as little) money as possible.
Pat Quinn was born into the final waning of the old East End, where working-class Londoners rented rooms in cramped, crowded, badly maintained terraced houses with poor plumbing and sanitation. Aged twenty, just married, Quinn and her husband, like hundreds of thousands of others, swapped their private landlord for a tenancy with the state. Long before the Luftwaffe and Hitler’s V-weapons knocked jagged holes in the soot-blackened brick of Bethnal Green, Stepney and Poplar, the three London boroughs that would eventually be merged to create Tower Hamlets, the municipalities had begun knocking down old streets and moving their residents into newly built council houses, bigger and lighter than anything they were used to, with modern kitchens and indoor lavatories. When the Second World War was over, the bulldozers returned to clear bombsites and slums all at once, and the construction of new homes went on.
The pattern was repeated across the country. There was a difference, however, between council houses built in the 1920s and 1930s and those built after 1945. The interwar municipal housing estates were focused on the poor, on replacing the worst slum housing, even though, in practice, the poorest of the poor could seldom afford the rents, and moved to another slum instead. The politicians who got the interwar houses built were motivated by the fastidious, paternalistic, missionary zeal of their nineteenth-century reformist forebears, together with a contrary mixture of fear that socialism would come (so we’d better show the workers that a capitalist society cares) and hope that socialism would come (and this is what it will look like).
After 1945, as the scale of council house building increased in the hopeful atmosphere of the budding welfare state, the builders’ masters voiced more ambitious aims. In 1946, Aneurin Bevan, minister for both health and housing, told Parliament that having the better-off catered for exclusively by speculative builders while the poor were set apart in council housing was wrong.
You have castrated communities. You have colonies of low income people, living in houses provided by the local authorities, and you have the higher income groups living in their own colonies. This segregation of the different income groups is a wholly evil thing, from a civilised point of view … It is a monstrous infliction upon the essential psychological and b
iological one-ness of the community.
Bevan’s stance had all sorts of implications, but the most significant was that there was no limit to the number of houses the state was prepared to build, that building would continue until there was a home for everyone – a point effectively reached in the 1970s, at about the time Quinn and her husband moved to their new council flat.
Until then Quinn – father a long-distance lorry driver, mother a worker at the Bryant & May match factory – and her husband had rented the downstairs floor of a private terraced house in Usher Road, Bow, a land of cobblestones, cigarette smoke, crowded pubs and crowded bedrooms, backyard privies and tin baths filled with water heated on the range. Usher Road was the kind of place the authorities considered a slum, and it was decided to knock the old terraces down. Residents were offered a choice of council house. Quinn chose a flat in a small new block near the Royal London Hospital in Whitechapel, two miles closer to the centre of London. Her husband was sceptical – Whitechapel had a reputation as a rough area where the sex trade flourished – but he went with her choice and they settled in. It is a measure of the relative value of private and council rentals in those days that their rent went up from £1 a week to £4.
I met her at a public meeting in Bethnal Green called to discuss ways of combating the government’s welfare changes and went to visit her at home a few weeks later. Her flat is one of ten in a plain, red-brick, three-storey block; five one-bedroom places on the ground floor and five two-bedroom flats on the upper storeys, one of which is Quinn’s. It was summer and red and white roses were blooming in the block’s communal gardens. Quinn showed me the fruit and vegetables the residents had planted in the spring: raspberries, strawberries, lettuce, onions, peas, beans, radishes. ‘Very optimistically a gentleman is trying to grow kiwis,’ she said. ‘The cherries aren’t quite ripe enough to give you one … there’s an aubergine there but I don’t think it’s going to make it.’
Only three of the ten flats still belong to the council. The rest have been sold off. Four are lived in by their owners and three are let out privately. Students share one of the flats, and in the others there are bankers (the flat is two tube stops from the City; you could walk to the Lloyd’s building in half an hour), an immigration lawyer and an accountant working in one of London’s temples of public art. ‘Irish, Welsh, Iraqi, Bengali … three Bengalis. And myself, English,’ Quinn said. It’s the sort of diversity that might have pleased Bevan. But the government wants Quinn out.
In the 1990s, Quinn was officially recognised as too sick to work as the result of a bundle of ailments (she lists them: joint pain, migraines, gastritis, bouts of depression, underactive thyroid) and since then has had her rent and council tax, currently £120.39 a week, covered by housing benefit. For living expenses, she received £112 a week in incapacity benefit. (The Joseph Rowntree Foundation reckons £200 a week, excluding rent, is needed to maintain a decent life.) But last spring, everything changed. The bedroom tax – which effectively fines Quinn for losing her husband – slashes her housing benefit to £97.15 a week, leaving her to make up the £23.24 difference out of her incapacity payment. Except now she’s not getting that either. At the same time she was hit by the bedroom tax, she was called in for a medical to reassess her fitness for work under the government’s new, tighter incapacity rules. The assessment consists of ten checks on physical ability, such as:
Can you move more than 200 metres on flat ground? (Moving could include walking, using crutches or using a wheelchair.)
Can you usually stay in one place (either standing or sitting) for more than an hour without having to move away?
If you experience fits, blackouts or loss of consciousness, do they happen less than once a month?
Then there are ten checks on your ‘mental, cognitive and intellectual functions’: ‘Can you deal with people you don’t know?’ or ‘Can you usually manage to begin and finish daily tasks?’
Each check answered ‘no’ scores points. The more points you get, the more likely you are to continue to be recognised as disabled. Quinn got zero points and a message telling her that the government accepted she was ill, but that she was not ill enough: she would have to start looking for work, and as long as she was unemployed, she would be switched to the Jobseekers’ Allowance – a cut in the money she lives on of 40 per cent, down to £72 a week. But because of the bedroom tax, £23.24 of that has to go towards her rent, leaving her with just £48.76 a week to live on; £22 comes out of that for gas and electricity, which leaves about £27 a week for everything else. She doesn’t drink, she doesn’t smoke, she doesn’t go to the bingo, she doesn’t have a car, but that £27 has to cover the TV licence and her phone, as well the dozens of small items everyone needs, like toothbrushes and soap and light bulbs and postage stamps.
And food.
Britain’s ever helpful banks have contributed to the picture. They have permitted Quinn to build up a debt of £6,000 on three credit cards. ‘It’s a nightmare,’ she said. ‘I had to apply for crisis loans. I haven’t paid the rent, the electric or the gas. At my age it’s embarrassing to be in this position.’ It wasn’t that she didn’t want to work, she said; she left school at fifteen, on a Monday, and got a job on Tuesday. She does unpaid volunteer work as a local health champion. ‘I can’t do the heavy stuff. I’m not saying I can’t work at all but they want you to work a full forty-hour week. They should prepare you for work and find out what you can do, instead of saying you’ve got to be prepared to work from now, without any preparation or anything.’
She will get a state pension, but not until November 2015. If she can hang on to her flat until then she’ll be exempt from the bedroom tax. But it isn’t clear how she will survive in the meantime. ‘I think there should be a fairer way of asking people to leave their accommodation,’ she said. Council tenants face a jail sentence if they try to sublet. I asked Quinn if a relative could move in so as to avoid the bedroom tax. ‘That defeats the purpose of having a second bedroom,’ she said. ‘Why shouldn’t I have a home I don’t have to share with anyone? I could have my granddaughter move in. But if I had her, my daughter would have to give up the family credit. There’s a way round it but somebody else has to lose money.’
One of the curious things about Quinn’s situation is that the government would love to give her £100,000, but she’s not prosperous enough to qualify for it. That figure is the maximum discount on the market price a council tenant who exercises Right to Buy can now claim in London. Given that her flat would be worth at least £300,000, Quinn could, in theory, buy it, sell it on and pocket the difference. But then she’d have nowhere to live; and she can’t raise the missing £200,000, because she has no money for a deposit and no way of getting a mortgage. She and her husband didn’t have a principled objection to Right to Buy. They just never got rich enough to get richer.
In most people’s understanding of the world I’d be considered a homeowner, although since I have a mortgage I am, for the time being, renting it from the bank. I was born at my grandparents’ house in Blackheath in the middle of the great London smog of December 1962, and since then I’ve had about thirty different homes: private flats my parents rented in London, a housing association property in Nottingham, state-owned homes in Lanarkshire during my father’s years working for the Scottish prison service, a council house in Dundee, then a private terraced house there (the first home my parents owned, bought when they were in their early thirties), student digs in Edinburgh and London, private rentals in Northampton, a flat of my own in Edinburgh bought when I was twenty-seven, various rentals in the Ukrainian equivalent of privatised council flats, residency in Moscow apartments belonging to Russia’s Diplomatic Corps Administration, two floors of a Georgian terraced house in North London bought with my then wife, a post-divorce rental in the East End, and now, my third tilt at home ownership, a flat in a converted school in Bethnal Green (Pat Quinn’s old school, as it happens).
I don’t expect to find myself li
ving in a council house in the traditional sense – that is, a household dwelling owned and run by the state – any time soon. But that’s more to do with the shortage of council houses, and the way they’re run, than with any objection on principle, or a conviction that council houses are doomed to be ugly and uncomfortable. None of the things tenants found repellent about life on some council estates in the 1970s – the crime and anti-social behaviour, the damp, the powerlessness in the face of council bureaucracy, the noise, the distance from children’s playgrounds, the difficulty of imposing personal style on a habitat you didn’t own, the penny-pinching bodgery of council repairs, the obstacles to moving – is inherent to municipal tenure; they’re the result of incompetence, carelessness and unreasonable economies.
Councils made some terrible mistakes in their postwar housebuilding programme, partly because of pre-Thatcherite Conservative populism. The Tories started a race with Labour over who could build more houses, abandoning Bevan’s conviction that numbers weren’t enough, that the homes had to be spacious and well built, too. The worst blunder involved the use of a Danish system of prefabricated concrete panels to build tower blocks three times higher than they were designed to be, assembled by badly supervised, badly trained workers and engineers. Hence the Ronan Point disaster in 1968, when a twenty-two-storey block in East London partly collapsed after a gas explosion, killing four people. The block was finally demolished the year before the great storm of 1987, which might literally have blown it down. Ronan Point was designed to withstand winds of up to 63 mph; some of the gusts during the storm reached 94 mph.
As the decades pass and the council homes of the 1950s, 1960s and 1970s grow into the urban landscape, as their brick and concrete weathers, as they benefit from comparison with the mean little boxes being built by private housebuilders, as a mix of new management, new investment and funds from the last Labour government have dealt with some of the backlog of repairs and design flaws, as the original intentions of architects become unexpectedly visible to a new generation, they are beginning to look like more attractive places to live. Too late for the less well-off; just in time for the hipsters. Rural peers now snap them up for their London pieds-à-terre. Wealthy parents buy them for their children. Buy-to-let investors cram them with students. I might have bought one myself, to live in; friends have done so. Once privatised there was no chance of the councils getting them back. I was shown plenty by estate agents in Tower Hamlets when I was looking for a place to buy – the agents call them ‘ex-local’, as in ‘ex-local authority’. They were among the few places of any size I could afford, and they still sell for slightly less than homes built for the market. This is unlikely to last. In the capital, council houses have gone vintage; council houses in inner London are the new lofts, to be boasted about and refitted with salvaged Bakelite and Formica by the trendiest of their new inhabitants. In addition to all the other indignities the poorest of the poor in London suffer, they now have an extra one: the implication that they never saw the potential.