This week, Boris Johnson has floated the idea of breathing new life into Thatcher’s right to buy policy. As the Tories face fierce local elections, headline-grabbing politics are a useful tool. With the new purchase right system, up to 2.5 million households could be able to buy their homes at a reduced price of up to 70%, according to the government.
The right to buy was one of Margaret Thatcher’s flagship policies, a policy that forever changed the housing stock – the types of housing available – in England. Thanks to this program, people were able to buy the social housing they rented at a reduced price. Now Johnson wants to do the same, but with housing association properties.
The original policy, in Thatcher’s 1979 manifesto, gave people a sense of ownership and self-determination. At the time, the proportion of homes available to people looking to buy was relatively even. Much of the social housing sold has not been replaced, laying the foundation for the current crisis, where housing prices have steadily increased as demand outstrips supply. In other words, politics has made it possible for many to dream of owning a home, but it has also made that same ambition a pipe dream for most young people today.
By resuscitating the right to purchase, the Prime Minister wants to prove that he can be a traditional conservative. Some of his latest interventionist policies, like putting calories on menus to try to control obesity rates, are a far cry from Thatcher’s style. By helping people own their homes, he hopes to win back voters who are reluctant in the face of partygate and the Treasury’s lukewarm response to the cost of living crisis.
It’s not a new idea. David Cameron flirted with the same policy in 2015, pledging to give people “a good life”. At the time, Johnson was the Mayor of London and far from being a politician. As the leader of a city at the center of the housing crisis, he worried about the level of subsidies needed to support the discounts. The amount of money needed for sales to build enough new social housing did not accumulate and plans were abandoned.
What was true then is true now, except that the housing crisis has worsened and today 4.2 million people are in need of social housing in England. “Every social housing sold will add to this waiting list,” said Kate Henderson, chief executive of the National Housing Federation.
The policy would have significant financial implications for housing associations, whose costs are already rising as they attempt to decarbonise and deal with siding. Their asset is the housing stock, and if they lose it, it affects their balance sheet and their ability to borrow and invest. “This is a very high-risk strategy, as housing associations also need to balance their budgets,” says Rachael Williamson, policy and external affairs manager at the Chartered Institute for Housing. If their margins are shrinking for a popular but financially questionable strategy, social housing could be less of a business model for them.
The policy is designed to help ‘generational rent’, but four times as many under-45s rent from a private landlord than from a housing association. If Johnson really wants to entice young voters with this narrative, he better start in the private sector. “It needs to start with more sustainable policies that can last longer than a political term,” says Anna Clare Harper, director of rental housing platform IMMO.
At a time when the housing stock is far from sufficient to satisfy the need, the right to buy simply does not make sense. Meanwhile, up to 100,000 new homes have recently been hit with a home building ban by Natural England. The environmental watchdog has put properties on hold following concerns for the natural environment in Devon, Hampshire, Norfolk and the North East. It could take up to two years for councils to sort this out.
Making planning more flexible, making relations between communities and developers more fluid, investing in technology and digitization are all good policies, even if they do not have a catchy turnover. Instead of trying to breathe new life into dead policies, Boris Johnson should try to build a framework for a right to build.