Flaws of ‘Right to Buy’ are searingly obvious

Selling off council homes may have benefited original purchasers but long term detrimental impacts are still being felt, argues Susan Rae.

It was the defining policy of the Thatcher decade. Amidst all the trumpeted privatisations of the 1980s, nothing was bigger than the selling off of council homes through ‘Right to Buy’. Sale of council homes itself was nothing new. The novelty came in the generous terms (up to 70% off valuation price) and the unilateral right of tenants to purchase – whether the landlord wanted to sell or not.

Small wonder it took off big time. Peaking in the late 1980s, sales continued through various reforms until 2016 when the Scottish Government brought the scheme to an end. By then half a million public sector homes were sold, 27,000 of them here in Edinburgh. With sales so heavily discounted, proceeds were never going to be enough to replace stock sold.

For many of the original purchasers there were real benefits. Mortgages little more or less than rents. Freedom to renovate and improve. A positive impact on street appearance.

But, over 40 years later the flaws of flogging off council homes are hugely apparent. In 1980 Edinburgh had nearly 60,000 council homes. Now we face a soaring population and desperate need with only 20,000 homes. Little wonder over 2,000 families are in temporary homeless accommodation costing tens of £millions a year, our housing list is growing and the cost of private rental is out of reach for most.

Where once Right to Buy was the preserve of longstanding tenants, taking their first, and often only step into property ownership, the same homes are now playthings of the market. Go onto any property website and you’ll find scores of ex-council houses trading at prices well in excess of what people on modest incomes can afford.

Private landlords have swooped in, taking maximum advantage of a lucrative market for renting out former public sector homes. I could take you to ex-council houses in Edinburgh where two bedrooms have been squeezed in to make up four, now rented at £1,800 a month, compared to £425 for the average two-bed council house. Five former council homes in my high rise block of 60 are now AirBnBs, with a number privately rented at more than double the cost of council rent.

Then another contentious headache: common repairs. At the council’s Finance Committee in October, councillors agreed new packages of help for low income home-owners in blocks of flats where council-led improvement work is due to take place. In the pilot of the ‘Mixed Tenure Improvement Service’, almost half (45%) of the privately-owned flats are in the hands of private landlords, further complicating matters.

As decades pass all homes need investment, often amounting to tens of thousands of pounds. The trouble is that this was never properly taken into account by central government when Right to Buy was introduced. So flat owners can now find themselves facing huge bills as their share of common repairs and improvements when many have low incomes or little equity in the property.

The Mixed Tenure service is a pragmatic response to that, with grants available for low income owners from the Energy Saving Trust and now further additional loans for other kind of work. The alternative, of works being stalled, is a lose-lose for everyone.

But it’s a sobering and costly reminder that ownership may bring freedom but it also carries a burden.