Tom and Jonny - the two younger, single, Archer males, previously resident at the increasingly overcrowded Bridge Farm - have just moved into 1 The Green. This small, but nicely renovated, semi is one of a small group of houses on, you don’t say, The Green, Ambridge.
In my view, 1 The Green is an interesting subject for a blog about homes to rent, as it was once a Council House (a form of social housing, now increasingly rare) and is now a Private Rental (a form of rental that was once relatively rare, and is now increasingly common. So how did we get from the early state (lots of council homes to rent) to the present day (few of them, and lots of private rentals)?
This same question was asked recently by The Guardian - “How did we end up here? Just under 8% of us now live in council housing; in 1979, the figure was 42%”. This news article is interesting, especially in its exploration of the changes, over recent decades, in how social housing is viewed. Wishing to live in a council house has gone from an aspiration, considered to be perfectly normal for many completely ordinary families on middle and lower incomes, to an aberration, with those living in them looked down upon by many parts of society. However, where the article is weak is the lack of attention to the changes in legislation that have moved us, as a society, from the one state of affairs to the other.
Right to Buy, covered in the Guardian article and introduced under the Thatcher government, is one such change. It allowed the Carters (Susan and Neil) to buy their council house and then sell it to a property developer - Matt Crawford - when they decided to self-build their new house. In time, Matt sold it to Will Grundy, who invested his nest egg (a legacy from a distant aunt) in it.
But, RTB is only one aspect of the changes, albeit the one that is most well known. I’d like to look here at the two less well known changes. We go to another Guardian article for a first mention of one reason: “The first was largely ended by the nationwide introduction of green belts from the 1940s onwards, the second by Margaret Thatcher’s termination of local authorities’ power to build housing.”
1980s controls on Local Authority spending
Around the same time that the Thatcher government introduced Right to Buy, they legislated to control the ability of Local Authorities (LAs) to spend on building new council homes (see point 8 of the history on this link).
Shortly afterwards, LAs were similarly prevented from borrowing money to carry out repairs and improvements on their stock (see point 9 of the history on this link). Alongside this, Government passed legislation requiring them to make such improvements (e.g. the Decent Homes Standard), leaving LAs in a very difficult position.
The answer, also provided by legislation (the Housing and Planning Act 1986), was for them to transfer their stock to a newly created type of landlord – a Registered Social Landlord, often called a housing association or housing trust. This government-created mass transfer of housing stock came to be known as Stock Transfer. Around the country, council tenants were invited to approve such transfers, with promises that their homes would be improved, modernised, and better managed. In general, they said yes.
Wholesale transfers of homes out of local authority control were the result of this deliberate policy of the Thatcher government. The intention was to reduce the role of local government in housing, and alongside this, they intended that private rental housing would step up to take its place. Again, they used legislation, this time:
The Housing Act 1988
Prior to this Act, private rentals had made up only a small part of the UK’s housing mix. Few properties were available, and rent restrictions, coupled with the difficulty of getting their property back if the owner needed it, meant that few people would take the risk of letting a property; streets of unsightly housing, left empty and not maintained, were the result. Those homes that were available on the private lettings market tended to be of poor quality, and occupied by those who didn’t qualify for a council house. Government knew that if the size of the council housing sector were reduced, the size of the private rental sector must increase to compensate. Their answer was a new type of tenancy, the Assured Shorthold Tenancy (AST), introduced in the Housing Act 1988.
Under an AST, the tenant *owns* the property during the period of the tenancy. They have clear rights of occupation, and to all extents and purposes the home belongs to them, but ONLY during the period of the tenancy. It’s very like purchasing a leasehold property, except that in a leasehold purchase the period of occupation tends to be much longer. In both cases, the landlord has responsibilities, and receives rent in return.
Importantly, the property owner is able to recover their property at the end of the tenancy period without the need to prove any fault on the part of the tenant, just by following due legal process. Generally this means providing sufficient notice to quit, and complying with all legal requirements first, such as protecting the tenants deposit, responding to any valid requests for repairs, providing an Energy Performance Certificate and carrying out yearly Gas Safety Inspections. This new protection for property owners meant that the purchase of property to let became a *safe* method of investment, and was particularly attractive to more mature workers, who anticipated the need to provide an income in their retirement; an in Ambridge, to Will Grundy. Nowadays, the vast majority of private sector landlords are individuals/couples, owning just one or two rental properties.
Over a short period in the 1980s, Government made a major change to the balance between home ownership, social rent, and private rent. Three decades later, the PRS is still growing; the average age of a first time buyer has increased by a few years, from 31 to 34 since 2008; and home ownership is on the decline, for the first time since it was boosted in the Right to Buy years.
Back to Ambridge
Back in Ambridge, there are at least a couple of ex council houses now in the private rented sector, including 1 The Green. A sale of a council home has provided a useful extra income to Will, supplementing what isn’t likely to be a high wage as a gamekeeper, and helping him provide for his growing family. On the other hand, his brother Ed can’t hope to ever occupy a council house in Ambridge, the village he grew up in; and only recently his granddad, Joe, was faced with being homeless. Winners and losers, eh?
A year ago, at the age of 94, Joe faced the prospect of ending his days in a homeless man’s hostel. At that time, the Grundies had been evicted from their private rental (under those no-fault provisions in the 1988 Housing Act), and all they could afford to rent was a single bedroom flat. With no prospect of being able to find a home for all three Grundies, Eddie and Clarrie approached the council for help with housing Joe. They had hoped, I’m sure, for a nice little retirement flat, or sheltered housing; instead, Joe was placed in a single men’s homeless hostel, alongside drug addicts and mental health sufferers.
Perhaps this was not the intention of the Thatcher government way back when, but it has certainly proved to be the result… *be careful what you wish for* comes to mind.
Further reading:
effect of LHA cap http://s3-eu-west-1.amazonaws.com/pub.housing.org.uk/LHA_cap_analysis.pdf
history of council housing http://www.bbc.co.uk/news/uk-14380936