Things not to do: Build much more social housing

There is a need for social housing for groups unable to afford ownership or private rentals, or those with special needs. But the biggest shortage in Britain is of private houses at affordable prices.  

In the 1970s and early 1980s social housing, called council houses, represented 35 percent of all houses. They were nearly all owned by local authorities and let out at subsidized rents. Waiting lists were long, sometimes 20 years, and constituted a major bar to mobility of labour, because someone moving to where there was a job would have to give up their place on a waiting list and have to start again.

Furthermore, the right to live in a house subsidized by taxpayers and ratepayers was a heritable asset. Once acquired, it could be passed on to children or dependents. There was a thriving black market sustained by people who no longer lived in their council houses, but let others do so for money while they pretended to be still tenants themselves.

The houses were generally not well maintained. There were always more claims on local authority funds, and tenants were not motivated to repair houses they did not own, so repairs and maintenance tended to involve lengthy waits, while property deteriorated in consequence. Some council estates became by-words for squalor.

The policy of Right to Buy transformed that situation. Government gave council house tenants the option to buy their home at a discount. If they had lived there for more than 2 years, they could buy at 20 percent below its independently assessed market value. This rose to 50 percent if they had lived there for more than 10 years. Many tenants bought, thereby ending the need for annual subsidy. The properties were immediately better-maintained, smartened up with fresh paint. Windows and pipes were fixed immediately since people were now protecting their own property.  

Purchasers felt they had acquired a stake in the country, since the home could be part of their estate, giving a substantial sum to their heirs. This was a population group that had previously owned no assets.

Rather than return to mass social housing, local authorities should be empowered to buy farmland in their area, give it planning permission, and sell it on to house-builders, setting a time limit for new homes to be built upon it. This could add a million new homes within 4 years, bringing down house prices to within the range of young couples. Huge numbers again would become home owners instead of the state dependents that social housing would make them.