Since the 1980s, when Thatcher introduced the ‘right to buy’, some two million tenants of council houses/flats have bought their homes, aided by discounts of up to £60,000. The market, however, has its own way of working. Instead of producing the acclaimed ‘property-owning democracy’, it has resurrected the evil practices of the 1950s and 60s. Practices made notorious by the exploitative Notting Hill landlord Peter Rachman.
In London, over a third of ex-council homes are now owned by private landlords, and privately let at rents of around £230 a week more than council rents. The landlords who have bought up homes from the original ‘right to buy’ tenants now have the opportunity to exploit many would-be council tenants who have been forced into the private rented sector by the sharply dwindling supply of council homes and the lack of build of adequate social housing.
Since the ‘right to buy’ was introduced, over a quarter of a million council homes have been lost from the council housing stock in London, according to a recent report from Tom Copley, a Labour London Assembly member. Under both Labour and Tory governments since 1998, more than 85,000 Council homes have been sold in London, but only 1% of that number of Council homes have been built in London.
Moreover, because of the scarcity of rented accommodation, landlords are able to impose huge increases in rents: in Tower Hamlets for example a council house tenant pays an average rent of £121 a week, while a private tenant is forced to pay an average rent of £212 a week. In Westminster, in the Millbank council housing estate, half of the 560 flats are now privately owned. 1-bed properties now fetch £450,000 and a 3-bed flat costs £600 a week to rent. That compares with local authority accommodation there, if you can get it, at a rent of just £106 a week.
So what is Cameron’s response? Almost unbelievably, he wants to aggravate the problem further by pushing ‘right to buy’ still further, through increasing the discount to £75,000 so that in his fantasied imagination a further 2 million tenants still left in Council homes across the country can be drawn into the ‘right to buy’ trap. Exactly the opposite policy is needed. There should be mandatory covenants on all ‘right to buy’ properties so that they cannot be let through the private sector.
In addition, local authorities should retain a stake in any property sold. Councils should also have a right not to sell if it would harm their housing capability. For Council houses/flats already sold and purchased by landlords for buy-to-lets, there should be strict rent controls and a tough crackdown on any potential Rachmans seeking to exploit the scarcity and utter desperation of many tenants. Above all, there should be a massive new house-building programme strongly focused on good-quality, but low-rent, affordable housing for poorer tenants.