An Overview of Housing in the UK
Any review of the current UK housing situation (frequently referred to as a "crisis") has to begin by taking a look at the rise and fall of council housing.
Local authorities traditionally provided good quality, affordable, accommodation to the masses from the end of World War II through to the 1990s. The author grew up in council housing in London in the 1960s and 70s and can testify to its merits.
The death knell for council housing was sounded by the Thatcher administration of the 1980s which introduced the "Right to Buy" scheme, giving council residents the opportunity to buy the properties they occupied at a significant discount to market value while at the same time restricting local authorities' ability to build new homes.
"Right to Buy" was, unsurprisingly, taken up by huge numbers of council tenants. Its effect was to drastically reduce both the quantity and quality of available council housing, ie lots of council homes were sold off without being replaced, and the ones that were sold tended to be the better homes leaving only lower quality property in the council stock.
The Thatcher government's 1988 Housing Act changed the laws on private rental housing, removing rent controls and substantially reducing tenant's security of tenure. The aim of this legislation was to encourage increased supply of private rental housing.
The combined result of Thatcher's housing policy was the bizarre scenario that within the same building flats were up for private rental at three or more times the rate paid by council occupants; with the council occupants enjoying greater security of tenure (ie they have indefinite tenancies) and better standards of repairs and maintenance (ie they have access to the council's maintenance services while their private counterparts are at the mercy of their landlords).
Thatcher's legislation, Blair's pension tax "changes", fluctuating stock markets, low interest rates and rocketing property prices have all fuelled a huge increase in property investment in the UK. The so-called buy-to-let boom has seen a return in large numbers of the private landlord, causing yet further price rises.
At present, UK housing falls into three main categories: owner-occupation (70%), social rented housing (local authorities and registered social landlords) (19%), privately rented (11%). Figures from UK government (http://www.communities.gov.uk/housing/housingresearch/housingstatistics/) as of 31 March 2006.
Social housing is provided by local authorities and housing associations and is operated on a non-profit basis for the benefit of tenants. Social housing offers significant benefits over the private rented sector, eg substantially lower rents, improved security of tenure and usually a better-resourced maintenance network to carry our repairs. However, it is becomingly increasingly difficult to obtain private rented accommodation and usually requires applicants to prove "need" or to be government-defined "key workers".
The term "housing crisis" has arisen as it has become increasingly difficult for first-time buyers to enter the housing market, eg First-time buyers 'at fresh low’ (BBC News, 22 December 2007).
At the time of writing (early 2008) UK property prices appear to be stabilising or beginning to fall in the wake of the US sub-prime mortgage problems and subsequent credit crunch, although the picture will become clearer when the property market traditionally picks up in Spring.
