Was Angela Rayner right to buy?

Angela Rayner continues to make headlines in relation to the former Manchester council house that she bought in 2007 and sold in 2015. Regardless of the capital gains tax questions she faces, Rayner’s Right to Buy purchase is seen by many as a bad look for Labour.

This is especially the case because she herself has criticised the Conservatives’ 2012 decision to give “loads and loads of discount” to other tenants who have chosen to follow in her footsteps and buy their council home – appearing to take issue with the generosity of the scheme, rather than the principle itself. In fact, Rayner is an enthusiastic supporter of Right to Buy, unapologetically defending her own decision as an example of a working-class woman asserting her economic independence.

The issue of council house tenants buying and selling their homes – and therefore denying others access to social rented accommodation – does not appear to have overly concerned her. This perhaps reflects that Right to Buy has never quite been the clear-cut Tory-Labour dividing line that it has been portrayed to be.

An often forgotten fact in the whole Right to Buy debate is that council tenants were buying their own homes long before Margaret Thatcher became prime minister. Opportunities to buy council houses existed from early in the 20th century, with sales initially requiring ministerial consent, as outlined in the Housing Act of 1936.

The process was then streamlined by the Conservatives in the 1950s, with a broad consent allowing councils to inform the minister post-sale. During the period from 1957 to 1964, approximately 16,000 council houses were sold across England.

Throughout the 1970s, council house sales gained political traction, particularly as the Conservative party championed policies encouraging tenants to buy. The number of council houses sold in England surged from fewer than 7,000 in 1970 to nearly 46,000 in 1972.

But in recent years Labour has sought to lay claim to the idea as its own. “It’s little known that the Right to Buy, which has become a totemic issue for many on the left, was originally a Labour policy,” said Lisa Nandy, during her time as shadow levelling-up secretary. Her remarks refer to the fact that, under Hugh Gaitskell in the 1950s, Labour had proposed increasing council house sales – albeit with a policy of building two new homes for every one that was sold.

In the event however, Right to Buy ended up being seen as the brainchild of Thatcher, who sold off a hundred thousand homes in each of the first three years after her 1980 Housing Act’s introduction. Her great innovation was to legislate to stop councils building replacement homes, thereby ensuring that the stock could only ever go down. Hence Rayner’s purchase of her own home could, at the time she bought it, only have contributed to a reduction in the amount of social housing on offer.

As part of an attempt to bring an end to publicly owned housing entirely, Thatcher also legislated to enable councils to transfer their remaining stock to housing associations. Many attribute much of Britain’s acute housing supply and pricing issues to these combined measures.

Between 1980 and 1997, the scheme led to the sale of more than 1,700,000 dwellings across the UK. It has contributed to the substantial decrease in social housing, plummeting from nearly 6.5 million units in 1979 to approximately 2 million units by 2017.

Simultaneously, it has been lauded as the primary catalyst behind a 15% surge in home ownership, escalating from 55% of householders in 1979 to its peak of 71% in 2003 (although this proportion receded in England from the late 1990s, reducing to 63% by 2017).

The Right to Buy scheme has been in place continuously in England since 1980, although it came to an end in 2014 and 2018 in Scotland and Wales respectively. While the 1997-2010 Blair-Brown Labour governments took some steps to reduce the incentives to buy council houses, they did nothing to overturn the ban on councils building new homes, and also oversaw a period of rapid house price and rent increases.

Thatcherites saw council houses as making tenants dependant on the state, and more sympathetic to socialism. Nick Clegg has claimed that David Cameron and George Osbourne opposed council housebuilding under the 2010-15 coalition government because “all it does is produce more Labour voters”. Cameron later went on to push for the right to buy housing association homes too. 

History may well judge Rayner to have been wise to have bought while stocks still remained

Perhaps ironically, then, it was during Cameron’s first term as prime minister that the government began to reverse the legislative obstacles to new council homes that Thatcher had created in 1980. In 2012, the coalition government allowed local authorities to retain rental income from council housing and borrow against it to fund new construction and maintenance.

Then, in 2018, Theresa May’s Conservative government announced that the borrowing cap for local authorities in England would be lifted, allowing them to borrow more money to fund the construction of new homes. What Labour did not achieve in 13 long years in office, two Tory prime ministers delivered in relatively short order.

>> Also reading: How Westminster is writing a new chapter in its council housing story

Since then, council housing has undergone a mini renaissance in the UK. Labour-run Birmingham has been among the UK’s most prolific builders of new council houses, although the local authority’s recent financial problems may put an end to this. Westminster City Council, which was once notorious under Shirley Porter for shipping its homeless people to neighbouring London boroughs, and illegally selling off its council homes to people deemed more likely to vote Tory, is not far behind Birmingham.

Although Westminster is now Labour run, much of the council housing currently coming through was initiated by the Conservative council that was in place up until 2022.

In truth however, what council housing has been delivered over the past decade has only made a minimal impact on national housing supply. And, as was reported recently, new schemes such as Mikhail Riches’ Stirling-winning Goldsmith Street scheme are already being sold off under Right to Buy.

Rayner has said that Labour will deliver significant new quantities of social housing. But, with Labour committed to supporting Right to Buy in the future, and little likelihood of substantial new central-government funding for council housing under a Starmer government, it appears the country will continue to be dependent on the private housebuilding and housing association sectors to build “affordable” homes to offset the council homes sold off.

While Rayner may rue the political fall-out from her own decision to buy her former council house, history may well judge her to have been wise to have bought while stocks still remained.

>> Also read: Council hits out at ‘damaging’ Right to Buy as homes in Mikhail Riches’ Stirling Prize-winning scheme set for sale