The sale of Margaret Thatcher’s council house under the right to purchase is a major cause of the housing crisis in Edinburgh today – Susan Rae
The sale of social housing in itself was nothing new. The novelty came from the generous conditions (up to 70% off the appraisal price) and the unilateral right of tenants to buy – whether the owner wants to sell or not.
No wonder he took off with a bang. With a peak in the late 1980s, sales continued through various reforms until 2016, when the Scottish government ended the program. By that time, half a million public sector homes had been sold, including 27,000 in Edinburgh. With sales so drastically reduced, the product was never going to be enough to replace the stock being sold.
For many first-time buyers, there were real benefits. Mortgages little more or less than rents. Freedom to renovate and improve. A positive impact on the appearance of the street.
But, 40 years later, the flaws of flogging council houses are extremely evident. In 1980, Edinburgh had nearly 60,000 social housing units. Today we are faced with a growing population and a desperate need of only 20,000 people. No wonder more than 2,000 families are in temporary homeless housing that costs tens of millions a year, our housing list is growing and the cost of private rental is out of reach for most.
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Where the right to purchase was once the preserve of longtime tenants, taking their first and often only step into ownership, the same homes are now market toys. Go to any real estate website and you will find dozens of old council houses that are trading for prices well above what people with low incomes can afford.
Private landlords stormed in, making the most of a lucrative market for non-council housing rentals. I could take you to some in Edinburgh where two bedrooms have been downsized to four, now rented at £ 1,800 a month, compared to £ 425 for an average two-bed council house. Five former social housing units in my 60’s high-rise building are now Airbnbs, with a number privately rented at more than double the cost of council rent.
Then another contentious puzzle: current repairs. At the council’s finance committee meeting in October, councilors agreed on new assistance programs for low-income homeowners in buildings where council-led improvements are to take place. In the “mixed tenure improvement service” pilot project, almost half (45%) of private apartments are in the hands of private owners, which further complicates matters.
Over the decades, all homes have needed investments, often amounting to tens of thousands of pounds. The problem is that this was never properly taken into account by the central government when introducing the right to purchase. So apartment owners can now find themselves facing huge bills for their share of joint repairs and improvements, while many have low incomes or little equity in ownership.
The mixed tenancy service is a pragmatic response to this, with grants available for low income homeowners from the Energy Saving Trust and now other additional loans for other types of work. The alternative, blocked jobs, is a lose-lose for everyone.
But it’s a sobering and expensive reminder that property can bring freedom, but it also carries a burden.
Susan Rae is Green Advisor for Leith Walk