Right To Buy - History

History

Individual local authorities have always had the ability to sell council houses to their tenants, but until the early 1970s such sales were extremely rare.

The Labour Party initially proposed the idea of the right of tenants to own the house they live in, in its manifesto for the 1959 General Election which it subsequently lost. Later, the Conservative-controlled Greater London Council of the late 1960s was persuaded by Horace Cutler, its Chairman of Housing, to create a general sales scheme. Cutler disagreed with the concept of local authorities as providers of housing and supported a free market approach. GLC housing sales were not allowed during the Labour administration of the mid-1970s but picked up again once Cutler became Leader in 1977. They proved extremely popular, and Cutler was close to Margaret Thatcher (a London MP) who made the right to buy council housing a Conservative Party policy nationally.

In the meantime, council house sales to tenants began to increase. Some 7,000 were sold to their tenants during 1970, but in two short years that figure soared to more than 45,000 in 1972.

After Margaret Thatcher became Prime Minister in May 1979, the legislation to implement the Right to Buy was passed in the Housing Act 1980. The sale price of a council house was based on its market valuation but also included a discount to reflect the rents paid by tenants and also to encourage take-up. The legislation gave council tenants the right to buy their council house at a discounted value, depending on how long they had been living in the house, with the proviso that if they sold their house before a minimum period had expired they would have to pay back a proportion of the discount. The sales were an attractive deal for tenants and hundreds of thousands of homes were sold. The policy is regarded as one of the major points of Thatcherism.

Proceeds of the sales were paid to the local authorities, but they were restricted to spending the money to reduce their debt until it was cleared, rather than being able to spend it on building more homes. The effect was to reduce the council housing stock, especially in areas where property prices were high such as London and the south-east of England.

200,000 council houses were sold to their tenants in 1982, and by 1987, more than 1,000,000 council houses in Britain had been sold to their tenants, although the number of council houses purchased by tenants declined during the 1990s.

The Labour Party was initially against the sales and pledged to oppose them at the 1983 general election, but the dropped their official opposition in 1985. However, at the 1987 general election, the Conservative government warned voters that a Labour government would still abolish the scheme.

When Labour finally returned to power in 1997, it reduced the discount available to tenants in local authorities which had severe pressure on their housing stock; this included almost the whole of London.