Housing has today moved centre-stage in the election campaign with the news that the Conservative manifesto contains a pledge to allow tenants of housing associations to buy their homes at a 35% discount. ‘Conservatives’, David Cameron claimed at the manifesto launch, ‘have dreamed of building a property-owning democracy for generations… This generation of Conservatives can proudly say it: the dream of a property-owning democracy is alive – and we will fulfil it.’
Cameron is certainly right that the creation of a ‘property-owning democracy’ has been a central objective of generations of Conservatives. The idea first emerged in the 1920s – the brainchild of the Unionist MP Noel Skelton – as part of a strategy of ‘constructive conservatism’ designed to win working-class votes during an era of mass democracy. The idea resurfaced after the Second World War as part of the Conservative response to the social reforms and electoral success of Clement Attlee’s Labour government. In 1946 Anthony Eden delivered a speech to the Conservative Party conference in which he called for measures that would enable citizens to buy homes, tenant farmers to buy land, and workers a share in industry. ‘Our objective’, Eden said, ‘is a nationwide property-owning democracy.’
After returning to office in 1951 the Conservative Party did, in fact, enjoy a series of remarkable successes in housing policy. Elected on the back of a pledge to build 300,000 new homes each year, the Minister of Housing Harold Macmillan soon met and exceeded these targets, largely as the result of public sector rather than private sector construction. Macmillan combined the rapid expansion of housing supply with modest measures to allow council tenants to buy their homes, and policies that were designed to support the creation of new mortgages. These measures did lead to a slow and steady increase in the proportion of owner-occupiers. The party’s claim in a 1954 election poster that it was ‘Smashing Housing Records!’ was by no means misplaced.
Many of these ideas resurfaced again in the 1980s, albeit in a rather more radical guise. The creation of a ‘property-owning democracy’ was now not merely about extending ownership – what Margaret Thatcher described as ‘a crusade to enfranchise the many in the economic life of the nation’ – but now formed part of a strategy to reduce the size of the state. Under the Right to Buy, council tenants were offered the opportunity to purchase their homes at discounts of up to 70% of the market value and were eligible for 100% mortgages underwritten by their local authority. Millions of people seized the opportunity, and more than two and a half million homes (approximately 40% of the UK’s total social housing stock) have been sold under the policy.
The current government, however, has enjoyed far fewer housing policy successes. After growing consistently under every government since 1918, owner-occupation began to slip back in the middle of the last decade (a consequence of the financial crisis), and the coalition has failed to arrest the slide. After hitting a peak of 71% in 2005, owner-occupation had dropped to 64% in 2011 and is still falling. Policies designed to address the slide – such as the 2010 extension of the Right to Buy, or the 2013 Help to Buy scheme – have had at best a marginal impact and may even have helped to fuel the house price increases that have made it so difficult to take that first step on to the property ladder.
Offering housing association tenants the opportunity to purchase their homes may temporarily arrest falling levels of owner-occupation – though in doing so they risk catastrophic consequences for the housing associations themselves – but will not address the underlying problems in the housing market. The key issue remains that housing supply has not kept up with housing demand, and nothing short of concerted effort to increase construction will resolve this problem. The ‘dream’ of the property-owning democracy may well still be alive, but it is certainly imperilled – and there is nothing in this latest announcement to suggest that the Conservatives can fulfil it.
Dr Matthew Francis, Birmingham Teaching Fellow in History, University of Birmingham