Housing policy and finance

During the period of the Thatcher and Major governments, 1979–97, Conservative housing policy reduced the amount of public expenditure on housing, brought about a marked reduction in housebuilding in the social sector, was instrumental in raising rents ahead of inflation in both the private and social rented sectors, privatised much of the local authority housing stock and the financial responsibility for housing rehabilitation, replaced local authorities by housing associations as the major providers of social housing, and increasingly left owner-occupiers free to face the vagaries of the market. By the late 1990s, however, owner-occupation was even more entrenched as the dominant tenure (in contrast to its lesser importance in many other European countries), while problems of affordability had become increasingly apparent in each of the housing sectors. This chapter seeks to explain the relationship between policies and housing markets in recent years and specifically examines: Housing supply and housing need. House-building and the house-building cycle. The marketisation of the private rented sector. Local authority housing: investment, rents and subsidies. The changing role of local authorities: from providers to enablers. Privatisation: the selling off of council estates to their tenants, estate privatisation, the privatisation of rehabilitation. Housing associations: the new providers. Owner-occupation: intervention or liberalisation? A policy of contradiction. Affordability and subsidisation. Housing tenure. In conclusion, the chapter contains case studies on the finance of private rented housing and on earnings, rents and house prices in each of the housing sectors