As the UK government comes under more pressure to fund additional housing requirements across the UK many are now looking back towards the 1980s and the right to buy legislation from the Thatcher government. While there is no doubt that the UK has always been predominantly a home ownership market there is also no doubt that the 1980s right to buy was something of a jackpot for many people who snapped up their council properties at a discounted price.
Looking back it does feel as though we are going full circle with regard to council housing with demand higher than ever as the UK population continues to grow. So why has the UK government announced plans to re-introduce the right to buy scheme?
Home ownership soared
The records books will show that the 1980s prompted a massive increase in home ownership across the UK and looking back with hindsight this was an opportunity too good to miss for many people. The vast majority of council properties had been well maintained and therefore when they were sold to their tenants they were in very good order. This lifted many people onto the housing ladder who had perhaps not expected to be able to afford such a move.
The massive increase in the number of properties held by individual owners helped to increase liquidity across the UK property market which is always a vital element of any growing investment arena.
Home ownership mentality
Looking back the 1980s saw a major shift in the UK property market which is still evident today. While prices have moved ahead and perhaps out of the reach of many first-time buyers, back in the 80s what was then a substantial investment in their home for many people saw massive growth. This also helped increase liquidity across the UK mortgage arena although it has to be said that UK financial markets have always maintained relatively high degrees of liquidity.
Non-domestic buyers have also been busy with a recent report suggesting that foreign companies have invested in excess of £150 billion into the UK property market over the last 15 years. However, has this prompted another stage of the UK property market evolution?
Has the situation moved full circle?
There were council properties aplenty back in the 1980s, with the UK government raising large amounts of cash from property sales, although the situation is very different today. There is an argument that the situation has now moved full circle with the UK government and local authorities under massive pressure to increase the number of council properties available as the population continues to grow.
As we touched on above, more and more people are now finding it a struggle to climb aboard the property ladder with many first-time buyers forced to sign on to council housing lists or find private rented accommodation. When you bear in mind the cost of building a home today, set against costs and values back in the 1980s, it is difficult to see where the UK government and local authorities will find the funds required.
Even though history will show that the 1980s kick started the home ownership movement in the UK, will politicians rue the day they sold off so many council properties on the cheap? Are they about to make the same mistake again?