Reform & Revolution 3 - The Right to Buy

Published by Ellie Warfield for 24dash.com in Housing and also in Featured

He was the man who carried through the most popular political promise in history. But 30 years on, how does Lord Michael Heseltine view the policy that gave council tenants a right to buy their home. Here, ‘Tarzan’, or as he was later known, ‘Hezza’, offers Ross Macmillan his personal glimpse into the policy which polarises opinion but gave council tenants the deal of a lifetime.

Where had the policy, which gave people the right to buy their council house, come from?

It came from Conservative councils. One of the first people to articulate it was former Conservative politician Peter Walker at a national level.

The experimentation of Right to Buy had been taking place in Conservative councils from the 1970s. The first commitment to it was made in the Conservative election manifesto of 1974 under Ted Heath and that then became Conservative policy. When I then became environment spokesman in 1976 I of course inherited responsibility for that.

Did you have to be convinced by the policy?

I never had to be convinced by it – I happen to think it was one of the great social revolutions of our time, but equally important the same housing legislation recreated the private rented sector. The introduction of shortholds in the same housing legislation was another vital revolution.

I just believed that what I was doing was a help to large numbers of people, was the right policy and improved the housing provision. That was the policy to which I was committed.

Were there any tensions within the Conservative Party about introducing the policy?

There were no tensions within the party about the policy. We all knew this was going to be popular and it was completely consistent with what I believed.

How do you respond to the criticism that allowing council tenants to buy their own home and putting a block on local authorities from using the proceeds to replace the housing stock is responsible for the dearth of council housing today?

The fact that we sold the tenants the right to own their own homes didn’t mean that the houses were not any longer occupied. They were occupied and the deal I did in 1979 provided for a very substantial part of the capital proceeds to be reinvested into housing. But of course you then have to remember that a very significant part of social housing after 1979 was provided by the Housing Corporation.

The question of replacing the houses is a matter for government policy – if governments haven’t built the houses they haven’t built the houses – that’s a question of individual government policy and we’re now talking about two governments over a very long period of time. It’s nothing to do with Right to Buy. Those families who bought their houses lived in those houses, they became owners and could therefore share in the prosperity associated with ownership. The fact that they bought them didn’t mean the houses ceased.

The regime changed after I left the Department for the Environment in 1983 and became much less sympathetic to housing replacement.

Do you regret that?

Yes I do. But I’m very proud to have been associated with the Right to Buy policy and, within the same legislation, the recreation of the private rented sector.

What were you trying to achieve?

The responsibility of ownership, the encouragement of people to share in the assets of society, the ability to pass on an inheritance to your children – all of these things were parts of the philosophy we advocated.

The speech I made in 1979 announcing the formal policy in the general election campaign set out my personal interpretation of what we were doing. Read an extract from the formal policy pledge below. Basically we were readjusting, in favour of the tenants, the prosperity associated with home ownership and I gave the figures which showed that if you bought your home as a private enterprise home 10 years ago the mortgage repayments you had made in order to pay your mortgage on the house you bought added up to much the same as a council tenant would have paid to live in a council house, but the owner had of course seen a massive inflationary boost to their assets.

The discounts that accompanied Right to Buy was in some measure to compensate the potential owners for the fact they had shared in none of this inflationary boost to ownership.

 Do you feel you achieved what you set out to with Right to Buy?

I think what we set out to achieve, which was to widen the property owning democracy was the purpose and I think we went a long way to augmenting it. And also we did create a much wider housing market that was also an important part of the policy and the terrible business of rotting properties forced into under occupation or dilapidation by rent control we ended – that was a scandal.

The council estates were often in a very bad way. I lived with this problem going then on into the 1990s when I created a thing called City Challenge and when I was able to develop the enfranchisment of council estates into co-operatives so that was all part and parcel of trying to raise the standard of public housing at that point.

Looking back, what was your fondest role within Government?

I was extremely fortunate in having a series of jobs all of which I was immensely privileged to have and which I found utterly fascinating. 

Right to buy – in a nutshell

The 1980 Housing Act introduced a right for council tenants to buy their houses and flats at discounts up to 50 per cent. Although nobody could argue with the policy’s success in extending home ownership, the accompanying restriction on local authorities to spend the sales receipts on new housing led to a gaping hole in the country’s social housing stock. Between 1979 and the end of 1996 local authorities, new town corporations and housing associations recorded over 2.2 million house sales. The 1980 Act also introduced Assured Shorthold Tenancy – allowing the landlord to gain possession of the property after a fixed period of time with no need to prove any statutory ground.

Life in the Jungle

On Right to Buy

“I’m not pretending that the council house sales pledge won the 1979 election but – next to the winter of discontent itself – it was, I am sure, the single most important contributory factor.” 

On Margaret Thatcher

“…[she] never came to regard me as ‘one of us’.

The infamous Mace incident in the House of Commons in May 1976, which led to the nickname ‘Tarzan’.

“A defiant gesture against a Labour rabble – but not everybody saw it that way.”

*Extracts from: Michael Heseltine, Life in the Jungle- My Autobiography, Hodder and Stoughton.

The formal policy pledge – April 1979

It was agreed I should open the campaign with a speech in my own constituency making the formal pledge to council-house tenants everywhere. I gave it at the very beginning of the campaign to a packed adoption meeting in Watlington Town Hall on 7 April 1979.

“Under the first Conservative Government after the war much of Labour’s controls were swept away.

Between 1951 and 1964 nearly 4 million people bought their own home for the first time.

It has proved in virtually every case the wisest decision they ever made.

The average house purchased in 1951 cost £2,000. Today that same house would be worth £16,000.

These are average figures…but they illustrate a trend that has meant for well over half our people a stake in the nation’s wealth which is personal, valuable and saleable and which enables parents to leave to their children a help-in-life far larger than those parents had for themselves.

But as house prices rose so those who hadn’t bought found themselves further and further away from the ability to buy.

As the capital value of privately owned houses increased, the owners obviously gained or at the very worst were protected from inflation. But in the case of new town or council houses the value increased but the tenants gained nothing.

Their rents rose over the years. In some cases they have more than paid for their houses but they own nothing.  And their children look forward to no inheritance.

The Conservative Party can no longer stand back from this growing divide in our nation.”

*Extract from Michael Heseltine, Life in the Jungle My Autobiography, Hodder and Stoughton

Next month: 1988 Housing Act

"Every loan that was agreed in those years had my signature on it."

James Tickell, former registrar, Housing Corporation between 1987 - 1992 on the Housing Act 1988