Labour and Housing – Part 6.
The financial implications of the Right to Buy scheme
By Eamon Dyas
The Thatcher legacy that began as practical policies in 1979 and which continues to permeate British politics was based on a strategy consisting of three components. Firstly, the oft-repeated mantra of the need to roll back the influence of the “Big State” – a euphemism for the dissolution of the socialised economy that had evolved since the war. Secondly, the need to shift the electorate’s perception of the State’s primary role from one which saw it as responsible for the protection and welfare of its citizens to one which laid greater emphasis on its role as the “balancer of the budget”. And thirdly, to inculcate the idea of “a property-owning democracy” among the populace.
These components were viewed at the time as the three-legged stool on which the Tory strategy rested with each leg performing a role that supported and enhanced the strength of the others.
But, in reality, this was not easily achieved. Examined more closely we find that, as things turned out, the object of achieving “a property-owning democracy” via the Right to Buy scheme was to sit uncomfortably with the idea of “balancing the budget”. The extent to which this was the case, and the means by which that discomfort was overcome, will be explored in the following account of those events.
Looking back from a time in the 21st century when easy credit is the norm and a willingness of the populace to take on credit seems to be infinite, it is difficult to envisage just how different the current financial environment is from that which existed in the 1970s and early 1980s. At the time when Thatcher and Heseltine (for it was he who was the more enthusiastic exponent of the Right to Buy scheme) were encouraging council tenants to purchase their council properties under the 1980 Housing Act there existed a marked antipathy among a considerable component of the working class to enter into any arrangement involving significant levels of debt.
But there was also the issue of working class access to such credit. Irrespective of the level of cultural resistance to credit, if it was not available in the first place the limits of that resistance could not be tested. In other words, the provision of such access was a necessary precondition to the erosion of that cultural reluctance. In order to meet this cultural challenge, it was necessary that the council tenants involved not only be induced by generous discounts, but have the financial means of taking advantage of such inducements. Short of handing over such homes for free this required that the hundreds of thousands of council tenants have access to a mortgage funding pool capable of facilitating their needs.
Traditionally, the building societies were the main suppliers of mortgages and at the time of the arrival of Thatcher’s government in 1979 they virtually monopolised the mortgage supply industry.
However, they were highly conservative when it came to who and for what they were willing to dispense such mortgages. They were also obliged to prioritise existing members seeking loans, and while many council tenants were also members of building societies the council tenant was not seen as the typical customer of the building societies at this time. Nonetheless, the heavy discounts associated with the Right to Buy scheme meant that the building societies were more than willing to get involved in the provision of mortgages for council tenants. As one commentator explained it:
“Before 1980, building societies were cautious about lending to fund Right to Buy purchases. In the event, however, high discounts made the risks associated with private sector lending to Right to Buy purchasers very low, and this increased the willingness of building societies to finance Right to Buy purchases.” (The Right to Buy: Selling Off Public and Social Housing, by Alan Murie. Published by Policy Press, University of Bristol, 2016, p.81)
But even though they were to view the provision of Right to Buy mortgages positively, the funds that building societies had at their disposal were limited by the savings invested by their members and those funds were totally inadequate to meet the anticipated sudden demand for hundreds of thousands of additional mortgages that came in the wake of the Right to Buy scheme.
Nor were the banks capable of providing mortgages for council tenants on the scale required by the Right to Buy scheme. At this time the banks were not real players in the mortgage industry. Insofar as they were involved at all it was in the small rarified sector of the high-end housing market.
And yet, the Right to Buy policy was arguably the most significant success of the Thatcher legacy – a success despite the initial opposition and extensive obstruction by Labour at Westminster and in local government (covered in a previous article in this series). The question that needs answering is how was this significant social engineering feat funded if it wasn’t primarily through the building societies or the banks?
An obvious source for such funds would have been central government but the Government of the day had been elected on the basis of a commitment to “balancing the budget”. Reducing the Public Borrowing Requirement was one of Geoffrey Howe’s prime targets in his first budget as Conservative Chancellor in June 1979 and at the time:
“Government expenditure plans provide for a reduction in public expenditure housing in England from £4.256 million in 1980-81 to £2.230 million in 1983-84, a 47.6% reduction. Similar cuts are to be made in Wales and Scotland, so that, as the House of Commons Environment Committee (1981) pointed out, housing expenditure will only account for 2.9% of total public expenditure in 1983-84, but accounted for 5.4% in 1980-81. The planned reduction in housing expenditure is thus a major feature of the government’s medium-term financial strategy.” (Housing Policies in the United Kingdom, by Danuta Jachniak. Published in Built Environment, Vol. 8, No. 1., 1982, p.7).
This made it impossible for the Government to take any active part in the direct provision of mortgages to finance the Right to Buy scheme. Instead, the Government restricted its activities in this regard to one in which it sought to cajole and entice the established sources of such funds – the building societies and the banks – to increase their efforts in this area.
Building societies and banks as suppliers of Right to Buy mortgages.
In the Summer of 1979 the Government had attempted to entice the building societies to be more proactive in the supply of mortgage loans to council tenants but this proved to be only marginally successful with the building societies arguing that its lending capacity was reliant on its ability to increase saver deposits. In that context, the recently appointed chairman of the Building Societies Association, Leonard Williams, criticised the action of Government in diverting public savings away from the societies into the increasingly attractive Government National Savings and gilts scheme then being promoted. Although at this time building society deposits had remained healthy enough to ensure they were capable of lending to the extent of £700 million a month, the rise in property prices meant that this figure was proving inadequate to meet even the demand for conventional mortgages. In other words, because of a 29% rise in house prices the number of conventional mortgages that the £700 million could service had dropped by almost a third from the year before. (See: Mortgage Men Hit Back, The Guardian, 3 June 1979, p.24).
The banks, on the other hand, were also in competition with the building societies and Government National Savings products to attract public deposits. From some years past the banks had been arguing that the building societies had unfair advantages when it came to attracting saving accounts from the public. With the arrival of the Conservatives in Government the banks saw the introduction of the Right to Buy scheme as an opportunity to abolish those advantages. Within weeks of the arrival of the new Government, Robin Leigh-Pemberton, then chairman of the National Westminster Bank (he was later to become Governor of the Bank of England), made a public declaration critical of the continued advantages enjoyed by the building societies.
Among the advantages which building societies had over the banks was that they paid tax on behalf of their depositors at an agreed “composite rate”. That “composite rate” was determined between the societies and the Inland Revenue. Because this rate was generally lower than the income tax rate, the banking interests argued that it acted as an inducement to those depositors subject to income tax to place their funds with building societies rather than the banks. The building societies also paid a lower rate of corporation tax and were not liable to capital gains tax on sales of Government securities if they were retained for more than a year. Added to this was the fact that as mutual non-profit organisations they did not have to pay shareholder dividends and remained outside the financial system for the purpose of monetary and credit controls.
When it came to attracting depositor accounts the banks argued that these advantages constituted unfair competition and were responsible for the changed circumstances since the early 1960s which had led to the building societies becoming the main custodian of the public’s savings during that period.
“This is demonstrated startlingly by an analysis of the distribution of deposits in the United Kingdom in the period 1962 to 1976. In 1962 the London clearing banks controlled 43.4% of the sterling deposits of UK residents other than banks. At the same time the building societies controlled half as much at 21.2% of sterling deposits.
“Move on 10 years to 1972 and the London clearing banks share has plummeted to 30.7% and the building societies have overtaken them with their control of some 35.6% of the deposit market. This is broadly equal to £13.3 billions compared with just £3.5 billions 10 years earlier – and that is before Britain was overcome by the great inflation of 1973 and beyond.
“In the mid-sixties the banks managed to pull back some ground and their share had recovered to 34% of the deposit market by 1974 before drifting down to 31.2% in 1976. Over the same period however the building societies were steadily gaining ground increasing their deposit base to £26.3 billions – or 37.7%. A far cry from the 21.2% market share of 1962.
“Clearly then the building societies have taken over the clearing bank’s role as the largest recipient of deposits in the High Street – a not unimportant part of the clearing banks’ business. Without their large small deposit base the banks have had to turn to the “wholesale” money markets for funds where they cost more and this could in many cases mean that borrowers from the banks – whether they be major corporation or an individual have to pay more for their money.” (The Banks Hit Back at ‘Menacing’ Competition”, by Alex Brummer. The Guardian, 23 May 1979, p.21).
The leading position that the building societies occupied by way of attracting depositor accounts was reflected in the even more commanding position they held when it came to supplying mortgages. In 1979, the year before the Government’s Right to Buy policy became the law through the 1980 Housing Act, building societies were supplying 95% of the total mortgages to the housing market generally.
Yet, as indicated earlier, despite their commanding position, the building societies by the end of the 1970s were still not in a position to meet the growing demand for mortgages due to the way in which house prices continued to rise. This meant that the available building society funds were only capable of sustaining a smaller number of mortgages with each rise in property prices. Ironically, in many ways it was the success of the building societies in attracting depositor accounts throughout the 1970s that fueled the very property inflation which diminished the number of mortgages they could issue each year. With the growth in depositor accounts came the capacity to provide more and bigger mortgages but that very aspect of their activities provided a stimulus for house price rises that in turn diminished their capacity to meet the growth in demand for individual mortgages. And this was the case even prior to the opening of the Right to Buy floodgates.
With regard to the banks: although they were in a worse position to service the anticipated demand, they recognised that the Right to Buy represented a potential change in the nature of the mortgage market both in scale and volume that was here to stay. The Right to Buy would not only represent a significant growth in the residential property market in the UK but that growth would manifest itself in terms of the continuing demand for further mortgages further down the line. Such a demand would not only be sustained in the annual take-up by council tenants of their Right to Buy as ever-growing discounts enticed new sales (the right to purchase council flats also subsequently came on line as well as the idea of shared ownership) but also in terms of the next generation of resale of such properties by council tenants wishing to move on and take advantage of the equity between what their property was now worth as against the discounted price they paid for it.
All in all, as far as the banks were concerned, the Right to Buy scheme had ensured that the mortgage sector would become an area which promised the prospect of continual growth for the foreseeable future. As a result, and despite the continuing disadvantages they laboured under when compared to the building societies, we see a growing interest by the banks in this sector. In the summer of 1979 Lloyds Bank and the Midland Bank announced their involvement in the lower end of the mortgage scale for the first time with the Trustee Savings Banks making similar announcements.
Then, in August 1979 the Government announced that it was to undertake a review of the mortgage market. Among other things, the review was to look at how financial institutions could be enticed into a greater commitment to the mortgage provision market and was to be led by the financial secretary to the Treasury, Nigel Lawson. (See: Lawson Head Hunts for Extra Home Funds, by Colin Brown. The Guardian, 18 August 1979).
After the Trustee Savings Banks announced plans to provide mortgages for the Right to Buy scheme the Treasury entered into discussions with them to establish the rate of interest to be paid by the tenants for such loans. These discussions continued in September and October of 1979. The ongoing context of these discussions was reported in the Guardian:
“The move will be welcomed by the building societies which provide around 95% of the mortgages granted in Britain. Mr. Michael Heseltine, Secretary for the Environment, has been pressing the societies to finance council house buyers but to date the pressure has been resisted because of the shortage of funds available. . .
“The demand for mortgages, which is incapable of being satisfied by the building societies, has apparently pushed the TSB into entering the market sooner than originally planned. However, only a relatively small proportion of the banks total assets of £5 billion will be committed to financing house purchases.” (TSB Set to Lend for Council House Purchase, by Kevin Page, the Guardian, 1 October 1979, p.18).
As things turned out, just like the efforts of the Government to extract the required investments from the building societies and the High Street banks, the involvement of the Trustee Savings Banks was to prove incapable of meeting the anticipated shortfall in council home mortgage requirements. The result was that, at least at the outset, the bulk of the pressure for such mortgages was to fall on the local authorities themselves.
The outcome of this situation has been explained in the following terms:
“Under discretionary sales policies most mortgages appear to have been provided by local authorities, which effectively replaced one debt with another that would be paid off, and yield receipts slowly. In the event, the proportion of Right to Buy sales in England financed by the private sector was 41% in 1981-82, 57% in 1982-83, 70% in 1983-84, 79% in 1985-86 and 93% in 1987-88. This pattern meant that public sector debt was transferred more quickly to the private sector, generating a windfall gain for the government.” (Murie, op. cit., p.36).
To provide perspective on the extent of local authority involvement as mortgage suppliers for the Right to Buy scheme, based on the above figures, it is worth considering that in England in 1981/82, 59% of the sale of 66,321 public property housing was funded by a local authority mortgage; in 1982/83, 43% of the sale of 174,697 such properties; in 1983/84, 30% of the 120,659 properties; [the percentage of the 1984/85 figure of 86,315 is not provided]; in 1985/86, 21% of the 78,433 properties; [the percentage of the 1986/87 figure of 77,114 is not provided]; and by 1987/88 a mere 7% of the 86,845 properties sold was facilitated by a local authority mortgage. (These figures are extrapolated from percentages supplied on p.36 and table 4.1 on p.66 of Murie, op. cit.). There is no reason not to believe that a similar statistical profile regarding percentages of local authority mortgages did not apply to sales in the rest of the U.K.
What this shows is that, in the initial years of the Right to Buy, local authority mortgages were critical for the sale of council properties under the scheme. Their involvement as mortgage suppliers then fell dramatically from 1984 onwards.
The gradual supplanting of local authority mortgages by private sources was made possible by a number of fiscal and economic changes that provided a more favourable environment for the banks. Firstly, in the 1970s the Labour government, in an effort to rein in the money supply, had introduced Supplementary Special Deposit Scheme which became known as the banking “corset”. The effect of this was to compel the banks to restrict their use of interest bearing deposits. At the same time, between September 1971 and January 1981, the banks were required under what was called the Reserve Asset Ratio to hold at least 12% of their eligible liabilities in the form of reserve assets. The percentage of banks’ reserve assets allocated under the Reserve Asset Ratio was reduced to 10% of their eligible liabilities in January 1981 and this in turn was temporarily reduced to 8% between March and April 1981. The banking “corset” was abolished in June 1980 and the RAR was finally abolished in August 1981.
These measures, on the one hand, had lent themselves to a situation where banks were inhibited from expanding their customer base for interest-bearing products such as those offered by the building societies (which remained exempt from these measures), and on the other hand, curtailed the banks’ use of their assets in any lending activities. This led to a situation where, aside from the advantages enjoyed by the building societies explained earlier, the banks were significantly handicapped by way of their lending capacity which remained reliant on their capacity not only to attract depositor accounts but on the permitted ratios of their assets which they could advance as loans, including mortgages. Such constraints played a significant part in their inability to optimise their activity in the provision of Right to Buy mortgages.
It was the easing of these restrictions in the early years of the Tory Government that provided the banks with the encouragement to enter the mortgage market. But, why did it take over two years after the Conservatives came to power in May 1979 for them to abolish these banking constraints?
The reason was that any easement of these restrictions would have created a sudden rush of interest-seeking capital into the banks at a time when a major policy platform of the new Tory Government was to pursue a policy of reducing the money supply.
The main measurement for money supply at this time was what was called M3 (measured as the total money in circulation plus bank deposits). The constraints originally introduced by previous governments (the banking “corset” and the Reserve Asset Ratio) had the effect of restricting the money supply as calculated by this M3 measurement. This was because such constraints helped to deflect the interest-seeking investor away from the banks (where such deposits would be calculable under the M3 measurement of money supply). Conversely, these constraints ensured that the interest-seeking investors would be encouraged towards the building societies where they would be invisible to that M3 measurement as building society accounts were not treated in the same way as bank accounts for the purpose of measuring the M3. This was also the reason why successive governments did nothing about the advantages enjoyed by the building societies explained earlier. These advantages and the additional constraints on the banks had sustained a situation where savers increasingly invested their capital with the building societies rather than the banks and in so doing facilitated a more favourable interpretation of the money supply measurement than would otherwise have been the case.
As long as significant interest-seeking capital was held in building society accounts it remained outside of the M3 measurement but if the banks were to suddenly become as attractive as the building societies for interest-seeking capital the M3 figure for money supply would expand significantly in a short space of time. Because of this, the Tory Government was, in the early years, being pulled in one direction by its avowed policy of restricting the money supply and at the same time aware of the need to ensure that the banks were in a position to take up the slack in the mortgage lending business that was necessary to its Right to Buy scheme. Hence, its delay in easing the banking restrictions at the time. It was the abolition of these restrictions by mid-1981 that in turn created the environment where the banks could play their role in supplanting the local authorities in council mortgage lending in the following years.
But, in the meantime, under a Government intent on dramatically cutting the Public Sector Borrowing Requirement how did the local authorities manage to supply a significant component of the Right to Buy mortgages for council tenants?
Local authorities as suppliers of mortgages.
In the years before the introduction of the Right to Buy scheme thousands of council properties were sold to their tenants annually. These sales were usually facilitated through mortgages supplied from a variety of sources including building societies and directly from the local authority itself. But, while this was something that could be managed when the numbers only amounted to thousands of such mortgages annually, it was a completely different thing when the demand equated to around a hundred thousand of such mortgages each year. As has been shown, neither the building societies nor the banks had the resources to provide mortgages on the scale required and the Government, for policy and ideological reasons, was reluctant to provide a central fund from which such mortgages could be drawn. Nor were the local authorities in a position to generate the required pool of funds through their own efforts. At the same time that the Government was pushing the Right to Buy scheme it was drastically cutting the central government grant and introducing rate-capping legislation which prohibited councils from raising capital through an increase in the rates. Therein, lay the conundrum of the funding of the Right to Buy scheme.
Looked at conventionally it was very much a mystery how, despite this situation, hundreds of thousands of council tenants were financially empowered to purchase their properties while neither the building societies nor the banks were in a position to provide the bulk of such funds and while local authorities were having their funding cut and prevented from exercising the means of raising extra capital by Government rate-capping legislation.
The explanation requires taking a step back from the conventional tripartite relationship between borrower, seller and mortgage provider. That conventional relationship involves a borrower procuring a negotiated loan from a third party provider in order to procure the property from the owner. However, in the case of a local authority property, where the local authority acts as both owner/seller of the property as well as mortgage provider, this conventional model ceases to have a relevance. Additionally, the fact that the local authority, as owner of the properties being sold, was a public body which had no shareholders to answer to meant, in this instance, that they could arrange payment as their circumstances dictated.
In April 1979 Michael Heseltine opened the Tory election campaign at his constituency in Watlington with a speech that committed a future Conservative Government to giving council tenants the right to buy their council home. In the course of his speech he stated that “hundreds of thousands of council tenants could buy their homes at half the market value”. He also said that the Government would ensure that:
“100% mortgages would be available to those who wanted and could afford them. Some Tory local councils already did this. It would involve no new public spending because the local councils had already borrowed the money.” (‘Tories Offer Half-Price Homes’ by John Grigsby, Local Government Correspondent, Daily Telegraph, 9 April 1979, p.10).
Thus, it was Heseltine’s claim that no new public spending was required for local authorities to provide up to 100% mortgages “because the local councils had already borrowed the money”. What Heseltine was referring to here wasn’t the fact that the local authorities had already made arrangements to borrow the enormous pool of capital necessary to provide such mortgages – even if the required volume of finance was available to be borrowed, such an exercise would have required every local authority in the country to have foreseen not only the outcome of the 1979 general election but also the way in which the Right to Buy scheme went on to overcome the significant country-wide opposition from Labour – an impossibility in April 1979, the month before the general election. No, what Heseltine was referring to was the fact that the council properties requiring the mortgages had already been paid for in their construction over the previous decades through the borrowing of local authorities.
At the time of their construction these properties were never intended to become commodified as part of financial transactions between the council as landlord-seller and the tenant as purchaser. It was only at the point when a political decision was made to treat them as such through the Right to Buy scheme that those properties assumed the form of pent-up value. But, aside from the minority of instances where the council tenant had access to funds provided by a third party, it was a pent-up value which only became nominally realisable at the time of the transfer of ownership from the local authority to the tenant. In the absence of a third party willing to fund the purchase the local authority, acting under the instructions of central Government, had no choice but to be a party to this nominal financial arrangement.
The way in which the Right to Buy scheme was made to succeed without any visible financial means of support was because local authorities, as the owners of the housing stock, were also the providers of the mortgages which they nominally provided to the tenant in order for the tenant to hand back to the local authority. If we think about it in terms of a scenario where the local authority handed over tens of thousands of pounds by way of a mortgage to the purchaser in order for the purchaser to hand it back to the local authority the farcical nature of the “funding” becomes apparent. Because of this no actual finance was required between the mortgage provider, the purchaser and the seller because, in this instance, the seller who owned the property was also the mortgage provider. For that reason, the mortgage was merely a nominal mortgage.
Heseltine’s insistence that local authorities act as nominal mortgage providers was confirmed six months later on 18 October 1979, after the Tories had formed the Government, when he said:
“Tenants who buy will be allowed to demand mortgages from local authorities based on a proportion of their income of 100% of the purchase price – whichever is the less.” (Half-Price Council Homes on the Way, by Tom Utley, Political Correspondent, Liverpool Echo, 18 October 1979, p.1).
So it was that a significant percentage of the mortgages provided to tenants wishing to purchase their council properties did not to come from third party sources but rather from the local authorities themselves and therefore involved no transfer of actual monies. All the local authority had to do was to agree with the purchasing tenant the terms under which the property would be handed over. Central to those terms was an agreement of the period of the nominal mortgage, the rate of interest of the nominal mortgage, and the monthly payment rates by which the tenant was expected to pay off the nominal mortgage. The phantom nature of the mortgage was further underlined by the fact that an important part of the overall arrangement was that Heseltine had insisted that the monthly tenant-purchaser’s repayment on the nominal mortgage was not permitted to be below the previous rent of the property which the tenant had previously paid when it had been directly owned by the council.
Insofar as there was any reality to the phantom monies associated with the nominal mortgages it related to the value that had been embedded in the bricks and mortar through monies invested in council properties by local authorities over the previous decades. In some ways it could be seen as comparable to the manner in which fossil fuel is laid down over many years previous to its release as energy by subsequent generations. In similar manner the Government Right to Buy policy compelled local councils to suddenly release the monetary value of the properties that local authorities had invested in over many decades.
However, unlike fossil fuels which dissipate on the occasion of their immediate release, the monetary value associated with council property does not dissipate but, combined with the oxygen of the housing market, tends to expand through the process of equity created by the sale and resale of that property in an evolving property market.
In other words, the council property involved in the initial transaction stimulates a new injection of capital when the tenant-owner subsequently sells the property. At such a point the conventional mortgage taken out by the new prospective purchaser (through a building society or a bank) is used to pay off the outstanding capital that remained under the terms of the local authority arrangement with the original tenant. Up to that point, the council (or more accurately as it turned out, the Government and the council which equally shared the receipts) had not been in receipt of any actual money (the “monies” it was allocating to itself as both seller and mortgage provider remained nominal until then) and the mortgage repayments were merely substitutes for the rental the property previously generated.
Although the local authorities took up a large chunk of the initial mortgage demand created by the Right to Buy scheme, this did not mean that the building societies and banks were not aware of the opportunity offered by way of profiting from future transactions associated with the ongoing sale of council properties at the point when the original purchasing tenant went on to resell the property. This, and the abolition of the financial constraints represented by the banking “corset” and the Reserve Asset Ratio meant that these institutions went on to develop lending strategies which involved a significant targeting of residential lending in the years since.
Between 1980 and 2015 more than 2.8 million council and social rented dwellings were sold in the United Kingdom under the Right to Buy scheme. This generated £50 billion in capital receipts for the Government. (See Murie, op. cit., p.65 and p.82). But it doesn’t end there.
Within a generation many residential properties will have been sold at least once and the significant financial underpinning which the Right to Buy scheme generated for the property market ensured that the capital expansion from that original base went on to provide an enormous stimulant to the wider property market, the reverberations of which we are still experiencing today.
The nature of the property market is such that each sale of a residential unit creates equity – the difference between the price originally paid and the subsequent price of the sale of that property. If we look at the capital that the Right to Buy scheme was eventually responsible for injecting into the property market through the commodifying of what had previously been public property the figures are quite staggering. According to the late John Hills, Professor at the Social Policy Unit at the LSE, although warning that there is some difficulty in arriving at an actual figure, he estimated that the accumulated discounts on council home purchases had accounted for equity of between £150-£200 billion by 2015, representing 3-4% of total wealth (Murie, op. cit., quoting Hills, p.94).
This kind of capital injection into the residential property market inevitably created a distorting impact on the “mechanics” of that market in particular but it had implications for other aspects of the wider market as it tended to divert investment capital from other sectors to the one where growth is seen as not only significant but reliable.
It achieved that characteristic of reliability because, in a liberal democracy, any significant expansion of the numbers of residential property owners among the electorate ensures that the interests of those residential property owners has to be taken into account by the political parties contending for government. Because this element of the electorate is also more likely to vote than those who are not property owners, the political system becomes skewed towards serving their interests.
In other words, once the ball represented by the Right to Buy scheme was set in motion it created a situation where the continuing growth in the financial value of residential property became a political as well as an economic objective which subsequent governments felt obliged to sustain.
The way in which this was done and the way in which pursuit of that objective came to compound the housing problem will be explored in the next instalment.