As a council house tenant who despises the idea of right-to-buy, I have to admit that George Osborne has put me in a quandary. Like all Tories, the Chancellor likes home ownership — after all, people who own rather than rent are more likely to vote Tory. It’s hard for him to repeat Margaret Thatcher’s right-to-buy trick because it was so successful that there’s hardly any council housing left to flog. So he’s increasing the incentive. As things stand, this Tory Chancellor is making me an offer: play his game and I can have wealth that I’m unlikely to acquire otherwise. Stick to my left-wing principles, and I can expect to be left behind as my friends and neighbours move on to ‘better’ lives.
The place I live in now, on a slightly grimy estate in Tooting, south London, has been my home for over 20 years. Amazingly, it’s now valued at £150,000 — but then garages in Chelsea sell for £500,000. Osborne has increased the discount for council flats from £50,000 to £75,000. So I could buy my ridiculously overvalued flat at £75,000. Next, I could pay for it via a mortgage made artificially cheap by his quantitative easing. A 25-year mortgage at 4 per cent would cost me £400 a month, way lower than my £480 rent. My interest rate might go up, but my rent would probably go up by more. And after three years, I could sell and cash in much of the £75,000 discount he is giving me.
So should I take Osborne’s borrowed shilling? If I bought my flat, I’d be selling my principles — ones which may seem old-fashioned now, but still ones I’ve lived with all my life. When people hear that I live in a council estate, there are two normal reactions: either that I’m a freeloader, taking a flat intended for someone in desperate need, or that I have no ambition because I have not jumped on the ‘housing ladder’. Both say something about our society. The ‘freeloader’ argument hurts the most: I like to think I have a deep sense of civic responsibility. And, for better or worse, I buy into a very clear idea about housing.
I’ve always thought it’s a basic right for everyone to have a reasonable, secure and sensibly priced place to live. This was the idea behind Labour’s New Towns Act 1946 and the Town and Country Planning Act 1947, which intended council housing for the ‘general needs’ of a wide range of society. The old almshouses were intended for the poor, but the new council houses were not. Aneurin Bevan said the new estates would be places where ‘the working man, the doctor and the clergyman will live in close proximity to each other’. Council estates were never meant to be ghettos, but places where all walks of life lived side by side.
I love my estate. I love that it is a mini–village in its own right. I love the mix of white, Asian and black families who have lived there for as long as I have. I love the Poles and Somalians who have moved in more recently. I have loved watching whole families grow up under my nose. I feel very safe there and, despite living in an area of high crime, I’ve never been burgled or mugged. (I don’t even have a proper lock on my door: I can get in with a ruler if I’m locked out.) And other than a short period after university, I have never claimed housing benefit. I pay my rent and so I see no reason to move out.
This vision was not shared by Margaret Thatcher, whose right-to-buy scam saw thousands of council properties become private homes. But councils were prevented from using the money they earned from the sales to build more homes. This led to a scarcity, which has fuelled a housing boom — while lining the pockets of those lucky homeowners. A recent study by the Daily Mirror found that a third of these ex-council houses are owned by private landlords — and many are rented back to tenants who receive housing benefit. Charles Gow, the son of Thatcher’s housing minister Ian Gow, and his wife own at least 40 ex-council flats on one London estate. The free market in rental prices will have made this a licence to print money.
A new ideology has taken root — clearly expressed by George Osborne when he said that home ownership is a ‘basic human aspiration’. What does this say about the Germans — do they lack aspirations or humanity? What about the Austrians, the Danish, the Dutch, the Koreans and the French? In all of these countries, most people rent. The same goes for the millions of Britons who never set foot on the ladder. The idea of a housing ‘ladder’ will baffle people in Northern Ireland, where prices have halved since the crash. The political fetish for home ownership incubated the sub-prime crisis in America. And with Osborne’s latest ‘help to buy’ policy, it looks like he wants to repeat the experiment in Britain.
For two decades, I have regarded the politicisation of home ownership as one of the most socially divisive forces in Britain. And we can see it again, as a broke Chancellor hawks underpriced debt to people whom he wants to become Tory voters. This may lead to ruin for the nation — but not for me. If I buy my house now, I could sell with a £75,000 tax-free gain. For a fortysomething whose net worth dips below £750 in a bad month, the idea of being worth £75,000 is very tempting. There is no way that I’d ever save that much through work. Yes, I’d be selling my principles. But Osborne is offering an amazing incentive.
Many of my neighbours will do what makes financial sense for them (and, importantly, their families). About a third of my estate is now privately owned. With Osborne hawking cheap to all and sundry, this will rise. Most people who resist buying do so because their credit rating is as horrific as mine once was. But I can borrow now. The London price bubble and Osborne’s cheap mortgage bubble have coincided, offering me what is perhaps a never-to-be-repeated chance to cash in from the Tory ideology that I’ve always opposed.
So do I stick by my principles — or do I play the cards that I have been dealt while calling for a different game? Principles are worth nothing unless they are tested. That’s what’s happening to mine now, with George Osborne’s indecent proposal. And I hate to admit that I’m finding it harder than ever to resist.Tags: borrowing, council housing, estate, Osborne, principles, right to buy, Thatcher