The Wandsworth Story behind Right to Buy

Wandsworth Tories introduced an aggressive Right-to-buy (RTB) policy a year before Mrs Thatcher came to power and made it a national Tory plank. It was, of course, a barn stormer and won many votes for the Tory party – and lost many more for a Labour Party perplexed about exactly how to tackle a policy, which was so perfectly attuned to an 80s Loadsamoney philosophy and such an anathema to any collectivist dream.

Lost in the political firestorm were some quiet voices on the Labour side, me included, who said as loudly as we could that outright opposition to the RTB policy was pointless but that reasoned criticism was valid and should have been pursued relentlessly. I recall two particular threads to our criticism. One was that receipts from sales should be used to replace housing stock.

Now in the current crisis about the lack of affordable housing everyone, even the Cameron Government, is talking, however disingenuously, about council house sales being accompanied by a policy of like for like replacement. The fact that the Blair/Brown Governments did no more to replace like for like than the Major/Cameron Governments does not make it any easier!

But the second criticism we had was that RTB would in the end result in the loss of affordable housing and would not be a long-term gain to the goal of creating a “property owning democracy”. Perhaps it is a little difficult to recall just how much Mrs Thatcher made of the creation of a share-owning, property-owning democracy but it was a central plank of the Tory philosophy of the 1980s. Now, however, with the first analyses of the 2011 Census figures we discover that for the first time since the war the proportion of the population living in private sector rented accommodation is on the rise and the number of owner occupiers is actually declining. Just what has happened to the property owning democracy?

Well using Wandsworth as an example reveals some interesting trends. Since 1978, the Council has sold 16,000 leasehold properties out of a stock of approximately 40,000 (there have also been thousands of freehold sales, including sales of whole estates). Having done some research on these 16,000 it appears that 5,650, or 35%, are now in the hands of private landlords, who have developed private sector rented empires on many Wandsworth estates.

The Council admits that one landlord owns 93 leases, from where he runs a private rented empire, whose asset value, very conservatively estimated, is worth more than £10 million. These 93 flats are let out almost exclusively to students of Roehampton University.

Moreover the Council admits to the fact that a further 17 landlords own more than 10 properties and another 83 own more than 5. But having done my own research on the figures and talking to the Council about their methodology, I am fairly confident that they have under-estimated the situation. The Council’s own figures are done on a simple spreadsheet exercise against a file of leaseholder names. They have not been asked to look more closely at the data and they have not done so – but I have.

It is clear that there are networks of ownership between members of the same family and apparently independent companies, often sharing the same addresses. Hence there are several small rental empires on, for example, Battersea’s famous Doddington Estate. In these properties, the Council makes an estimate for housing benefit calculations of rents are about 250% higher than the Council equivalent for the neighbouring properties. So for example, a two-bed Council owned flat is let at £123 per week and the privately owned neighbouring flat has a base of £320 per week for benefit calculation – the actual rent might be much higher.

As of early December, 2012, 31 of these properties were leased back by the Council for housing homeless families, all of whom were in receipt of Housing Benefit or Local Housing Allowance. No doubt some of these families will be hit by the so-called Benefits Reform that some Tory councillors defend on the rather ironic grounds that it will force private landlords to lower their rents. What a trick! Essentially guilty of creating a rental market with highly inflated rents they now accuse those very same landlords, they created, of exploiting the benefits system.

What I find extraordinary about this situation is that the Council officers, and the Tories, find none of this surprising. As one officer said to me, “If you return the properties into the market place then you will see the market acting as it always does with tendencies towards monopolies and exploitation”. He was accepting the reality of the situation. The Tory response is, of course, to defend the market despite, or because of, its faults, and actively to work to destroy the collectivist response to a major human need, which was the original purpose of council housing.

They have the temerity to criticise council housing and many of the subsidies that they claim it was based on and yet do not bat an eyelid at those very same once public resources being used for personal profit and gain.

This is perhaps not surprising amongst Tory councillors, who in Wandsworth are distinguished by the rise of its very own rentier class. It is not necessarily easy to interpret from the members’ register of interests but it looks possible that up to 10 Tory councillors, 20% of the whole, rent out properties for an income. But what I do find fascinating is that some Labour members seem to accept the market-place’s role, the place of market rents as a standard and the inevitable supremacy of market forces. Curious, when council housing has for a hundred years been a collectivist and, despite the occasional disaster, a highly successful response to the major problem of housing the totality and not just the affluent in our population. Doubly curious given that the two oldest council estates in the country, the Totterdown estate, and the direct works built Latchmere estates, are both Wandsworth estates!