Love her or hate her, Mrs Thatcher’s recent passing has certainly stirred up a hornets nest of debate around the world.
She certainly left a legacy, some good things and some bad things, but what was her contribution to the construction industry and UK housing in general?
Are we in a better position because of what she did, or did her policies at the time make things worse?
What are the lasting effects of the Thatcher years on today’s housing?
Certainly many people in the UK would be thankful of the fact that the Iron lady sought to massively increase home ownership in the UK, and the “Right to buy” scheme, which was an initiative which was actually started in the 1970′s in London by the then GLC. Mrs Thatcher simply rolled that out nationally in the 1980 housing Act.
The right to buy scheme
The sale price of council houses were based on the properties market value at the time, but the added bonus was the fact that it included a heft discount for tenants, also based on the time that had lived in the house.
Sounds great but of course to avoid speculators, the stipends were the fact that if the new owners suddenly decided to sell up and move home after acquiring it as their own, they would have to pay the discount back to the government.
The right to buy was a very popular scheme and in 1982, only 2 years after the scheme was rolled out, around 200,000 people had already bought their local authority house, with the proceeds of the sales going directly to local government, although many citizens outside the scheme failed to see the benefits as much of the funds went against paying debts off, a legacy from the previous labour administration and the collapse of the economy during it’s tenure.
By 1987. the amount of people who had bought their own home in this scheme rose to over a million houses, although this slowed down considerably at the end of the 1980′s.
A knock-on effect was there was far less council housing and local authorities did not replace the properties, preferring to look to housing associations and the private sector to house social tenants.
A problem for tenants in private rented housing was the introduction of the Assured short hold tenancy in the housing act 1988 which meant that a tenant had only 6 months assurance that they would be able to live in a house and gave powers to landlords to easily and legally dispose of tenants and I myself have been the victim of this in my student days, for the only reason being the house had risen in value so much during only 6 months of my stay, the greedy landlord decided to sell and make a fast buck!
A positive effect, in theory, for local authorities is the fact they did not have to spend so much of their budget on maintaining council owned houses.
So what about the people who bought these houses?
For many people, being able to own their own home was a dream come true, thanks to Mrs Thatcher, and there was certainly a positive effect on the building and home improvements industry during that time as new owners sought to customise their houses to make them stand apart from council owned houses in the same street.
Typical home improvements at the time were:
- A new front door, often a UPVC one.
- Double glazed windows
- A new driveway or garden landscaping
- Altering the wall coverings with exterior wall coatings, paint, pebbledash or stone cladding.
- New interior features such as a new bathroom or kitchen.
- A satellite dish, and for some, their first phone line!
Many people were very excited at being able to own their own home, and that is a positive effect left over from the thatcher years, however things have changed since then.
Social Housing today
Social housing today is largely managed by private social landlords or not for profit organisations, and overseen by the Homes and communities agency in England and Wales.
Home ownership grew from 55% of the population in 1980 to 64% in 1987. By the time Margaret Thatcher left office in 1990 it was 67%.. Source: Wikipedia
2005 saw changes to the act and tenants were required to have lived in the home for at least 5 years in order to qualify to buy, however the housing market had changed, houses had risen in price, in some cases, to unrealistic levels, and people were just not buying houses any more.
Too many people had bought a house as an investment rather than a home, and with mass immigration thanks to Tony Blair, the UK press seems to go on and on about how little housing remains, and the ridiculous price of renting or buying today.
As of 2 April 2012 the Right to Buy discount has been increased to a maximum of £75,000 or 60% of the house value (70% for a flat) depending on which is lower, indicating the current situation whereby the value of homes has risen so high, no one can implement a similar scheme even if they wanted to and we are left with part rent/part buy, which is hardly as good and still means the house is not truly yours.
Thatchers legacy for the UK building industry.
The boom years of the 1980′s were quite good for the construction and home improvements industry and David Pretty, the then CEO of Barrat homes said of the right to buy scheme……
……[the] Right to Buy had been a “double-edged” sword, which made households more prosperous while at the same time contributing to today’s crisis in housing and the shortage of social stock.
So not everyone thought it was a good idea and although the housing boom was good for many, it was bad for many others too.
For those in new bought council homes, the sky was the limit, but that left many other people unable to access social housing due to a reduced stock, plus increases in rents and home values marginalised people into poor quality accommodation.
The Thatcher era was a period of sharp public spending cuts, reductions in investments on major things such as railways, schools, roads and universities, however she was praised for her determination to push some major infrastructure projects ahead such as the channel tunnel and other public works that came to distinguish her from her predecessors.
Private finance initiatives
Mrs Thatcher brought in several projects around the UK that were essentially the forerunner of PFI and John Major sought to increase that in 1992, which was then expanded further under Tony Blair after 1997, however, the down side is that much investment was placed in risky schemes, and now much of construction that was created under the PFI schemes are hopelessly mismanaged and in debt.
These schemes continue to this day and are certainly a legacy of Thatcherism that many people are not happy with. So what about the bad bits?
Thatchers policies in industry for example, saw whole towns decimated with the closure of coal mines and factories and the UK ceased to be a manufacturing base, and we saw a rise in imports of goods and materials, made abroad and supposedly cheaper, intent on a benefit to our economy, however this was not the case, and many towns and cities saw a dramatic decline, with the “haves” and the “have nots” being a benchmark for the Thatcher years.
Margaret Thatcher brought home ownership in reach of a lot of people, but the policies at the time then sharply reduced the amount of social housing being built, pushing up private rents through demand and excluding the needy, something that social housing had sought to eradicate, now turned about face, and in essence became part of the problem in itself.
Whatever your opinion of Mrs Thatcher, her legacy is here to stay, good or bad, and with the current economic gloom, maybe it is time to rethink the mistakes of the past, to ensure they do not happen in the future.