Socialist Worker

Gordon Brown has no solution to housing shortage

by Kelly Hilditch
Issue No. 2052

Housing has been left to rot

Housing has been left to rot

Gordon Brown, who is currently touring the country in the run-up to his anointment as Labour leader, last week outlined his “vision” for housing.

He talked about putting more money into social housing – giving many people hope that a Brown premiership might actually do something to tackle the chronic housing crisis in Britain.

But it is important to look at the detail. Brown said he wanted a “home-owning, asset-owning, wealth-owning democracy… the aim is affordable housing”.

This suggests that Brown’s housing policy will be aimed primarily at encouraging more ownership rather than on providing cheap public housing for rent.

This fixation on ownership is part of the problem, not part of the solution. Britain has home ownership rates of 69 percent – the highest in Europe. In Switzerland, in contrast, only 37 percent of people own their homes.

The current housing crisis has been caused by decades of government policy that pushed home ownership and ran down council housing – fuelling an unsustainable boom in house prices.

This started in 1980 under Margaret Thatcher’s Tory government. She passed legislation that gave tenants the right to buy their council homes at a discount.

In the first two years alone, some 400,000 families bought their council property. Today it is estimated that around 1.5 million council homes have been sold off under the “right to buy”.

The predictable result has been a massive shortage in affordable housing. In November 2005, the Scottish Executive decided to suspended all council house sales for five years to tackle the shortage.


Several councils in England have also introduced strict regulations to prevent former council tenants from reselling their properties too quickly.

But even though council house sales have gone down, since 1997 New Labour has been doing its best to make local authority owned housing a thing of the past.

Blair’s policy on housing was centred around privatisation. Councils are pressured into handing over housing stock to private “social landlords”.

The government’s “decent homes” rules mean that council housing has to reach a certain standard by 2010. But the money needed for repairs is not available to local authorities – they can only get the money if they transfer housing stock to private hands.

Between 1990 and 2003 some £13 billion was taken out of council housing and put into central government. This sum is almost two thirds of the amount needed to bring all council homes up to standard.

And the government continues to prevent councils from using the money they raise in rents to fund repairs – some £1.55 billion was withheld last year.

According to a Joseph Rowntree Foundation report last year, “receipts from right-to-buy sales have yielded around £45 billion” while “only a quarter has been recycled into improving public housing”.


The relentless promotion of stock transfer means that the number of council homes has been falling rapidly – as has spending on new homes. In 1980 councils spent £5,600 million on new homes. By 2002 this had fallen to £200 million.

There’s a common myth that housing problems are concentrated in big cities – especially places with large immigrant populations. But this is not the case.

Social housing is now seriously lacking in rural areas – only 5 percent of houses in villages are social housing compared to a national average of 23 percent.

Under New Labour the gap between rich and poor has widened – and this is abundantly clear in many rural areas. By 2004 there were 93,000 second homes in the country, predominantly located in rural districts in England.

According to the government there are a growing number of villages where up to half the properties are second homes.

This increases the cost of housing – as well as reducing the money available for services, since the council tax paid on second homes is up to 50 percent less than normal.

So council owned rented accommodation is disappearing and the costs of buying a house are spiralling. That means more and more people are dependent on private rented accommodation.

This again benefits the rich. The fastest growing sector of the housing market is “buy-to-let” mortgages – properties bought by private landlords and rented to tenants. These made up 11 percent of mortgages in 2006 – so far this year they make up 21 percent.

The result is that many people are paying higher rent to private landlords, instead of low cost rents to the council. In many cases, tenants are living in former council owned property that is now in the hands of a private landlord.

We want to keep up the pressure to make sure that the affordable housing Brown speaks off helps the 1.6 million people on council housing waiting lists get into decent homes.

That means putting money into building new council owned homes, rather than chasing the dream of a “property owning democracy ”.

For more on the campaign for council housing go to

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Tue 22 May 2007, 18:46 BST
Issue No. 2052
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