Housing Act 1980

The Housing Act 1980 was an Act of Parliament passed by the Parliament of the United Kingdom that gave five million council house tenants in England and Wales the Right to Buy their house from their local authority. The Act came into force on the 3 October 1980 and is seen as a defining policy of Thatcherism. In Scotland the Right to Buy was provided by the Tenants' Rights, Etc. (Scotland) Act 1980 and for Northern Ireland it was left to the Housing Executive.

Background

Since the Addison Act 1919 the number of council houses had steadily risen for over fifty years and council tenants could only buy their home with the permission of their local authority. The Conservative party under Margaret Thatcher had promised in their manifesto for the general election of 1979 to give council house tenants the 'legal right to buy their homes' [http://www.psr.keele.ac.uk/area/uk/man/con79.htm#sale] .

The Act

The Act came under Michael Heseltine's remit as he was Environment Secretary at the time. On proposing the Bill to Parliament in 1979 Heseltine said it "lays the foundations for one of the most important social revolutions of this century". [Paul Balchin, "Housing Policy: An Introduction" (Routledge, 2002), p. 188] Gerald Kaufman, then in the Labour Party Shadow Cabinet and a former Environment Minister himself, said the Act would "not provide a single new home and [would] deprive many homeless people or families living in tower blocks from getting suitable accommodation". [Ibid, pp. 188-9.] The Labour Party was vehemently opposed to the Act but by the general election of 1987 had dropped its opposition to the Right to Buy. [http://www.psr.keele.ac.uk/area/uk/man/lab87.htm]

The Act allowed tenants who had lived in their homes for at least three years to buy at 33 % discount of the market price and 44 % for a flat. If one was a tenant for over 20 years they got a 50 % discount. Those not allowed to buy were tenants of charitable housing associations.

However many of the houses sold were built in the 1950s and 1960s, they were of poor quality and are today referred to as [http://www.wbs-ltd.co.uk/refurb_non_traditional.htm Non Traditional Housing] , many had serious structural defects and were designated defective, the passing of The [http://www.legislation.gov.uk/RevisedStatutes/Acts/ukpga/1984/cukpga_19840050_en_1 Housing Defects Act 1984] was required to allow for grants to be given to unsuspecting buyers, and to implement a cut off date for the issue of such grants.

As a result of increased building costs a further act was passed [http://www.opsi.gov.uk/si/si1988/Uksi_19880923_en_3.htm Housing defects Act 1988] to limit the amount of money payable, and move some types of Non Traditional Housing into different categories, for different levels of grant.

Mortgage-interest tax relief was also in operation and the Act provided the right to a mortgage from the local authority. The Act introduced the concept known as a 'secure tenancy' which restricted local authorities power to recover possession from their tenants. The Secretary of State had reserve powers to intervene with local authorities if they did not comply with the Act.

The Act also gave those who paid a £100 deposit the right to buy their home at a fixed price in a period of two years after paying the deposit. If the tenant was to sell the home they bought under the Act within five years of purchasing it they would have to share the capital gain between themselves and the local authority.

Results

Home ownership grew from 55 % of the population in 1980 to 64 % in 1987. By the time Margaret Thatcher left office in 1990 it was 67 %. However, the number of public houses built went down to 35,000 in 1990 from 170,000 in the mid-1970s, with most of these built by housing associations rather than councils. 1.5 million council houses were sold by 1990, by 1995 it was 2.1 million and as a result of the Right to Buy the Treasury received £28 billion. Proponents of the Right to Buy argue that it gave working-class council tenants opportunities to get on the property ladder which they would not otherwise had had without the Act.

Critics of the Act argue that it was designed to pass the responsibility of old defective housing from the government to the new homeowner, the act also added to the current shortage of council housing and the rise in homelessness and claim that this is a result of the Act. Others claim that when inflation rose towards the end of the 1980s and the recession of the early 1990s came, many people could not afford their payments on their mortgage and therefore had their houses repossessed. Also, when prices came down after they had first purchased their home, some found that their houses were worth less than their mortgages, which came to be known as 'negative equity'.

Gordon Brown announces plans to "relaunch" council housing shortly after becoming Prime Minister of Britain in 2007.

Notes

References

*John Campbell, "Margaret Thatcher: The Iron Lady" (Jonathan Cape, 2003), pp. 231 - 236.

External links

* [http://www.rpts.gov.uk/about_us/lvt.htm Government LVT website]
* [http://www.lvtbulletin.com Summaries and Analysis of LVT decisions]