Memorandum-to-the-Prime-Minister-on-Unaffordable-Housing

Appendix 6 -
The loss of low rent housing
(Peter Ambrose)
Over <strong>the</strong> course of <strong>the</strong> twentieth century profound changes <strong>to</strong>ok place in almost all aspects of UK housing
provision and tenure patterns. Around 1900 <strong>the</strong> vast majority of households rented from a private landlord with
only about 10% owning <strong>the</strong> property <strong>the</strong>y lived in.The rate of home ownership in <strong>the</strong> UK is now 72.3%
(Wilcox 2004,Table 17d).
Conditions have improved immensely as a result of 100 years of housing and public health legislation although
in 2001 4.2% of housing in England (or 885,000 units) were still classed as unfit for habitation (Wilcox 2004,
Table 23b).There has been very little change in <strong>the</strong> number of rooms per housing unit over <strong>the</strong> last 100 years
but <strong>the</strong> level of occupancy has fallen from about 4.0 people per household <strong>to</strong> 2.4 in 2001 (Glennerster et al.
2004, p57).The 2001 Census shows that now almost one third of households had only a single member and
only one fifth had dependent children.
Over <strong>the</strong> first six or more decades of <strong>the</strong> twentieth century <strong>the</strong> UK housing provision system (see Appendix 1)
shifted <strong>to</strong>wards a dual tenure pattern.The bulk of <strong>the</strong> output was ei<strong>the</strong>r housing for sale <strong>to</strong> owner-occupiers or
local authority housing for rent.The s<strong>to</strong>ck of local authority housing in <strong>the</strong> UK peaked at about 6.5 million
units, or 31.5% of <strong>to</strong>tal s<strong>to</strong>ck, in 1976. It has since declined <strong>to</strong> about half that number - about 3.3 million units
(Wilcox 2004,Table 17c).
Loss of council s<strong>to</strong>ck <strong>to</strong> owner-occupancy
Much of <strong>the</strong> explanation for <strong>the</strong> loss of public s<strong>to</strong>ck lies in <strong>the</strong> large volume of individual sales from local
authorities <strong>to</strong> owner-occupancy under <strong>the</strong> ‘right <strong>to</strong> buy’ legislation. Mrs Thatcher was a firm opponent of
council housing. Under her administrations local authority housing ceased <strong>to</strong> be seen as a financially rational and
socially acceptable solution <strong>to</strong> housing needs and became instead <strong>the</strong> problem.The ‘right <strong>to</strong> buy’ policy was a
sure-fire elec<strong>to</strong>ral success. Sales of local authority s<strong>to</strong>ck in<strong>to</strong> owner-occupancy <strong>to</strong>talled over 2.2 million units
between 1980 and 2003 and <strong>the</strong> annual number has been rising sharply under new Labour (Wilcox 2004 Table
20d).The loss of council s<strong>to</strong>ck has especially affected many rural areas in <strong>the</strong> home counties and low cost
housing has virtually disappeared.
Sales have been at a massive discount, <strong>the</strong> average ranging from about 50% in 1999 <strong>to</strong> 42% in 2002 (Wilcox
2003a, Figure 2.4.1). Following <strong>the</strong> sale of a local authority house or flat <strong>the</strong> average stay of <strong>the</strong> purchasing
tenant is maybe 15-17 years but <strong>the</strong>n <strong>the</strong> unit is lost <strong>to</strong> low rent s<strong>to</strong>ck and for <strong>the</strong> rest of its life changes hands
at market prices. Many council houses in, for example, Buckinghamshire were sold <strong>to</strong> tenants for £25,000 and
have since been sold on at figures in <strong>the</strong> £150,000/200,000 range.
In addition a substantial and growing number of sales are for ‘buy <strong>to</strong> rent’.The number of ‘buy <strong>to</strong> let’ loans has
increased sharply (Wilcox 2004,Table 55):
Zacchaeus 2000 Trust - <strong>Memorandum</strong> <strong>to</strong> <strong>the</strong> <strong>Prime</strong> <strong>Minister</strong> - May 2005 41