Thatcher's legacy

Next week, Len Bonnington will move out of the Brighton flat he has owned for the past 19 years. Even though he stands to make a huge profit – he bought it for £10,250 and is selling for £155,000 – he can’t wait to leave. “I’ve had a lot of problems over the years with the council and the maintenance charge for the flat. I’ve never regretted going through the right-to-buy process, but I’ve had a lot of headaches because of it and I’ve had enough,” he says.

Bonnington is one of more than 2 million people who have bought their council homes since Margaret Thatcher gave them the right to buy in 1980. The policy has always been controversial: 60,000 social homes are lost through the policy each year, while social housebuilding has nose-dived from 110,000 in 1980 to 22,000 in 2002. The policy has been blamed for contributing to a doubling of households in temporary housing to more than 100,000 since 1997.

Nevertheless, the right to buy seems to be here to stay. The Housing Act 2004 extended the period tenants must wait before they exercise it, but the concept is still going strong: the ODPM announced proposals last week for Social Homebuy, where tenants who cannot afford or do not have the right to buy or acquire are given a discount of up to £16,000 to buy their homes (HT 8 April, page 9). As this policy goes out to consultation, we met four people affected by the existing policy and asked what impact it has had on them.

The buyer who found subsidence

For Len Bonnington, right to buy has been a “mixed blessing”. In 1986 he paid £10,250 for his two-bedroom, ground-floor flat in central Brighton and he is about to sell it for £145,000 more: with this equity, he will be able to move to a residential home for the elderly in Horsham, West Sussex. But, he says, ownership has not always been easy.

The problems started in the summer of 1999 when he received a bill from Brighton & Hove council for more than £17,500. This was the estimated cost of repairing a subsidence problem in Bonnington’s flat. He had noticed the problem in 1991 and contacted the council to voice his concerns, but the council took no action until eight years later – when he received the bill.

He says: “I could see that something was wrong as far back as the early 1990s.

The council didn’t seem to take my concerns seriously and neither did my neighbours.

At the time I was the only leaseholder in the block, which had 10 tenants, and no one else seemed to have the same degree of concern about the property as I had.”

Bonnington belives the discrepancy between his stake in the block and the council tenants’ caused tension. “I was a homeowner and they weren’t. They didn’t feel the same sense of urgency about asking the council for the repairs the block needed,” he says.

By 1999 the block had another leaseholder, who also received a large bill for the repair work, and together she and Bonnington approached the Brighton, Hove and District Leaseholders’ Association for help. Over the next two years the association contested the council’s claim that the two were liable for their full share of the repair work, and the council finally agreed that Bonnington should pay only £1900.

Bonnington says the experience of fighting the repair charge was stressful and draining, but it is for another reason that he has decided to sell up – nuisance neighbours. “The tenants who live above me keep on disturbing me. They seem to argue all night, they slam the hallway doors and the children have ripped my telephone line off the wall a couple of times,” he says. “It never used to be like this around here and I’ve had enough.”

But he is adamant that, on balance, the right to buy has been a positive thing in his life. As he points out: “As the years go by, your mortgage payments go down while council rents go up. Also, it’s important to me that I have something to leave my family. So I’ve no qualms about right to buy – it makes sense.”

I was a homeowner and the tenants were not – they didn’t feel the same urgency about asking the council for the repairs needed

Len Bonnington

The buyer on a run-down estate

It takes John Tierney a full five minutes to decide whether buying his one-bedroom, top-floor flat from Manchester council in 1996 was a good deal. The flat is in the Bentley housing estate, better known as Redbricks, in Hulme, just south of the city centre, and he paid £10,000 for it. He looks out of his living room window and surveys the black, heavy-duty barbed wire that forms a thick trim around the blocks of flats opposite and says that his neighbourhood is looking more and more neglected these days. He’s not sure when the estate is to be refurbished.

Finally, he says: “Up until last year I’ve always said to the people on this estate that, if they could, they should buy their property because it would give them more control over their lives. And I suppose I am glad I bought this place: it is good to feel that you own it. But for people new to right to buy, I’m not sure it is worth it, around here at any rate. Apparently the council values these flats at around £80,000 apiece, but I find that hard to believe. There’s not been enough investment in these flats – and it shows.”

The dilapidated state of the three-storey block he lives in makes Tierney angry because, he says, it makes him wonder what happens to the £200 service charge he pays each month to the council. “I have never known exactly what the service charge is for – I’ve never received a detailed breakdown of what the charges cover and I’ve found it nigh impossible to get a proper explanation out of the council,” he says.

Of the 250 or so residents in the estate, Tierney reckons about 30 have used their right to buy. But he says: “Everyone is paying a different service charge rate because there doesn’t seem to be a standard method for working out the charge.”

He thinks the service charge will go up again. “Sooner or later this estate will have to be modernised so that it meets the government’s decent homes standard by 2010,” he says. “My worry is that because so much work needs to be done, our service charge will go up. It’s another reason I’m not now in the habit of recommending right to buy to my neighbours.”

The thought of a service charge rise concerns Tierney because he has found it difficult to contest past rises. “The council runs you ragged,” he says. “You can never speak to the same person twice about what the charges mean and any information you do receive is written in legal language. You need money and resources just to work out what your rights are as a leaseholder and then more money to fight for those rights.”

Tierney says he originally bought his flat because he wanted to be more independent of the local council. From that point of view he wasn’t successful: he still feels the estate’s fate, and so his home’s fate too, is the council’s concern rather than his.

He concludes: “I don’t think there’s been enough consideration of leaseholders’ rights in right to buy – it’s as if we should just be grateful that we were able to buy from the council. And that’s not fair.”

The property developer

The right to buy is also the chance to sell.

But are resale prices so high that they take properties out of the country’s social housing market? Property developer Jonathan Price should know; he’s bought two former council properties in the past two years and they both came with big price tags attached.

You need money and resources just to work out what your rights are as a leaseholder and then more money to fight for those rights

John Tierney

Last year Price paid £180,000 for a one-bedroom flat in Islington, north London, which had been bought through the right to buy in 1988 for £28,000 – a discount of £35,000, based on an estimated open market value at the time of £63,000. Last year he also paid £200,000 for a similar ex-council property in Islington, though he does not know how much the former owner of this second flat originally paid.

After carrying out some minor refurbishment in the flats, Price now rents them out to young professionals. He says that their being former council properties has made no difference to the rent he is able to charge and he’s confident the flats are a good long-term investment. “Other than flats in high-rise blocks, I am more than happy to purchase former council flats as buy-to-let investments. In a sought-after area like Islington, the origins of a property really don’t make that much difference.”

And it’s not only in London that former social homes have found their way into the mainstream housing market. In 1998 the Joseph Rowntree Foundation conducted a wide-ranging review of the right-to-buy policy, and found that former council properties, on resale, do not offer a “way in” to homeownership for people who cannot buy elsewhere in the market. This was partly because the right to buy is used most often by people on popular council estates offering family houses and in areas of high housing demand. People on estates in areas of low housing demand are less likely to buy.

“From my point of view, right to buy has simply added to the choice of homes available on the market,” says Price.

The private tenant who can’t move

Christina Greenhorn and her family feel stuck in the small, three-bedroom house in Cinderford, Forest of Dean, that they rent from a private landlord. Greenhorn can’t afford a bigger house in the area: houses sell for more than £160,000, and that’s more than she can afford on her modest salary as a senior support worker for the local council.

It’s not that Greenhorn is the only earner in the house. Her 19-year-old daughter Deanna works as a care assistant for elderly people, but both mother and daughter feel they are already stretched to the limit in meeting their £420-a-month rent and providing for themselves and the family’s young children – Greenhorn also has a six-year-old daughter, and Deanna has a three-year-old toddler.

As they can’t buy their own home, the women want to live in a council or housing association home because they don’t trust their private landlord. Greenhorn says he has increased the rent by £70 in the past year and she’s now afraid to ask him to repair their bathroom, where the ceiling has gone black with damp, in case he raises the rent again. She says: “With a private landlord you never know where you are – they might suddenly want to push up the rent or sell up. Though I don’t think the rent for a council house would be a lot less than what we pay here, at least we’d have more security.”

The trouble is, the council just doesn’t have enough properties to go round. In its 2001 housing needs survey, the Forest of Dean council estimated that 1600 extra affordable homes were needed in the area. The council says that the shortage is a result of the right to buy draining its housing stock, though house price inflation is also to blame.

Greenhorn is all too aware of the lack of council homes in her area. “A lot of people I know have bought their home, and I know of estates that have gone totally private,” she says. “But I’m not knocking those people. Why not buy if someone is offering you a good deal? The problem is these homes haven’t been replaced, and that leaves people like me stuck.”

Greenhorn and her family have been on the council’s housing list for a year now, but she is sceptical about her chances of getting the home she wants. “The homes are awarded according to a points system and until my eldest daughter and her baby moved out last month we had quite a few points because we were an overcrowded household. Now we have fewer points so we’re not such a priority,” she says. “It’s very frustrating –

I’ve lived in this area all my life and I just want a comfortable home for my family. It would seem that’s too much to ask for.”