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Margaret Thatcher Began Britain's Obsession With Property. It's Time To End It

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http://www.theguardian.com/society/2014/apr/06/margaret-thatcher-britains-obsession-property-right-to-buy

In 1975, in her first speech as leader to the Conservative party conference, Margaret Thatcher declared her belief in a "property-owning democracy". She didn't invent the phrase – the 1920s Tory MP Noel Skelton should take the credit for that, and the American liberal philosopher John Rawls picked it up before she did – but it became the most distinctive of all her many distinctive ideas, the one that most succinctly describes the Britain she wanted to create.

Through thrift and hard work, went the theory, ordinary families should be able to buy their own homes. It would give them security, dignity and freedom and liberate them from the nannying of local council landlords. It would make them better citizens, with their own stake in the economic wellbeing of the country, they would have an incentive to contribute to national prosperity. It exemplified her belief that capitalism was good not only for the rich, but for people on modest incomes. As the then environment secretary, Michael Heseltine, put it later: "Home ownership stimulates the attitudes of independence and self-reliance that are the bedrock of a free society."

So Thatcher allowed council tenants to buy their own homes at reduced prices, and since the right to buy was introduced, about 1.5m have been bought. She presided over an economy in which house buying became a national obsession and home ownership went up from 9.7m to 12.8m. Fundamental to her idea was that government, which had built between a third and a half of all homes for the previous three decades, should step back. Councils could no longer build council housing. The market would provide. Houses would be built by housebuilders, to use the standard term for the companies that buy land, win planning permission and then (sometimes) put homes on it.

To be fair since Cromwell this nation has always been a property owning democracy because you couldn't have the vote unless you had property!!!

Then there is the idea that if you own property you'd be less likely to risk your wealth with those damned Labour loons in charge. Still it's not like the last Labour loons increased everyone's property wealth to levels where we'll all soon be property millionaires.

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http://www.theguardi...ty-right-to-buy

To be fair since Cromwell this nation has always been a property owning democracy because you couldn't have the vote unless you had property!!!

Then there is the idea that if you own property you'd be less likely to risk your wealth with those damned Labour loons in charge. Still it's not like the last Labour loons increased everyone's property wealth to levels where we'll all soon be property millionaires.

Facha's fault innit.

And wrong.

My parents were climbing the property ladder from 1962 onwards.

Selling off Council Houses? Labour Policy under Hugh Gaitskill (pre-Wilson 1959'ish) stolen by GLC and then Thatcher.

Its why I don't vote anymore. Policies are the same whoever gets in!

Edited by aSecureTenant

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http://www.theguardi...ty-right-to-buy

To be fair since Cromwell this nation has always been a property owning democracy because you couldn't have the vote unless you had property!!!

Then there is the idea that if you own property you'd be less likely to risk your wealth with those damned Labour loons in charge. Still it's not like the last Labour loons increased everyone's property wealth to levels where we'll all soon be property millionaires.

I have every sympathy with the idea that people should be able to buy their own homes.

But the idea that the council tenant can force out the Landlord and at a discount was just stupidity.

Although I would wholeheartedly vote for the party that allowed this with private Landlords too.

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I have every sympathy with the idea that people should be able to buy their own homes.

But the idea that the council tenant can force out the Landlord and at a discount was just stupidity.

Although I would wholeheartedly vote for the party that allowed this with private Landlords too.

Forced out?

I'm currently being woo'd with HelpToBuy to buy my Council flat!

50% discount, on a doubled valuation!

In another two years, when I actually qualify, they will no doubt have 'doubled in value' again.

Edited by aSecureTenant

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Forced out?

I'm currently being woo'd with HelpToBuy to buy my Council flat!

50% discount, on a doubled valuation!

In another two years, when I actually qualify, they will no doubt have 'doubled in value' again.

yes, forced out...the law says they have to inform and allow.

Im not sure there is a single housing manager who wants to dispose of stock.

People who are in these places are free to buy a home, it just shouldnt be the one the council owns...thats supposed to be for the people who really need help.

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Thatcher was on the housing bandwagon but it was a political football before her time with Conservatives preferring private ownership and Labour not so much but not completely anti - she went with the trend and reinforced it.

After 1997 it became Labour's sole raison d'etre - and that sole policy has been continued and recently crazily reinforced further by the LibDem/Conservative coalition.

Edited by billybong

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http://www.theguardian.com/society/2014/apr/06/margaret-thatcher-britains-obsession-property-right-to-buy

To be fair since Cromwell this nation has always been a property owning democracy because you couldn't have the vote unless you had property!!!

Then there is the idea that if you own property you'd be less likely to risk your wealth with those damned Labour loons in charge. Still it's not like the last Labour loons increased everyone's property wealth to levels where we'll all soon be property millionaires.

It's rubbish to say that Thatcher started the 'obsession'. Vast numbers of houses for relatively ordinary people to buy were built in the 1920s and 30s. In almost any suburban area you will see whole streets of them. If people hadn't wanted to buy them, the builders wouldn't have built them. Both my sets of grandparents were buying their own homes in the 1920s, and they were by no means well off people.

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Facha's fault innit.

I could have guessed it was from the Guardian! :lol:

I think you'll find it was the Normans wot dunnit.

"An Englishman's home is his castle"

They built loads of 'em. Although you could also blame the Welsh for putting up such a struggle....

a_alnwick_castle.jpg

Edited by Eddie_George

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But in those days there was not the high demand for property like today, far fewer people chasing sufficient homes....we were also building more then..... the up keep and maintenance of the council homes was expensive and most of the homes had been in the same families for decades they had probably paid for the homes in rent many times over.

A friend of mine got offered their London three bed council house for £30k in the 1980s and turned it down, they still live there, the roof has been renewed and the house painted a few times in that time, they will be living there for many more years yet. ;)

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IMHO it's not the ownership of property per se that has been the problem rather the change in attitude towards property - seeing ones pile of bricks and mortar as an investment rather than, first and foremost, a place to live. The vulgar, never mind economically irrational, obsession with just how much ones pile is worth today as opposed to last week, is a relatively modern one.

It's also not just the attitude towards what the headline price of ones home may be is, it is other previously time honoured property related wisdoms that seem to have been forgotten, such as ongoing cost of ownership.

Almost none, and I mean NONE, of the circle of friends who bought in the last 20 years have, until some time after buying, acknowledged that there are costs associated with property ownership that, over the typical duration of ownership, can accumulate quite significantly. Whether it's costs associated with purchasing and selling, maintaining the general state and decor, repairing/replacing the boiler, etc. Cost of insuring the place, and so on. All however, when they bought, merely focused on the price paid and what, at some time later, it may well have been worth IF they sold it the very next day.

When they began, inevitably over the ensuing years, to occasionally 'moan' about the latest bit of 'repair' and maintenance, the cost and often the unexpected inconvenience and bad timing of it, I would merely shrug my shoulders and say "So? Whaddya expect? A boiler that lasts forever? You own a home? It goes with the territory! You didn't put any money aside for such contingencies! How is that worthy of dinner conversation?!...."

The other revealing change in attitude was that of mortgage holders (particularly those on IO mortgages!) endlessly referring to their houses - and how it was so much better than renting, etc. I had no end of difficulty persuading them, and those around them, to see the flaw in their logic and choice of language. "Try stop paying the mortgage and lets see how long you get to stay there....".

It's not just private sector home 'owners' either. I recall meeting a woman who, after a multi-year wait, reasonably deservedly got and moved into a council flat. She invited people round to celebrate with her the new stage in her life - welcoming them to "my new flat". I discreetly reminded her it was not her flat. Yes it was her home - but not her property!

Finally, above all else, people have lost all sense of perspective in the prices they pay for property- regardless of whether they can genuinely afford to pay whatever absurd price is being asked. I have lost count of how often I have tried to convey the non-trivial difference between 'price' and 'value'. People seem to use these words so interchangeably that they assume them to be the same. "Price is what you pay, value is what you get". They look at you and go "Huh?".

Only when people re-learn the significance of value derived from something will they more properly assess whether a particular price is worth paying.

Edited by anonguest

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Some promising bits, but I was very disappointed to read this:

a slow deflation might be desirable; the ideal could be that prices stay the same, so that they gently fall in real terms

We've been seeing this nonsense spouted for over a decade. It's trite, lazy and dangerously disingenuous. I get that the writer is terrified of spooking the cattle by threatening their all-important nominal equity. But this country will never, ever break out of its housing psychosis so long as the government is perceived as guaranteeing nominal prices. It's like trying to get someone to stop gambling: OK, we'll let you keep all your winnings, and compensate you for any losses, but really, this isn't good for you...

Unless the clear and present danger of nominal falls is burned into the public consciousness by clear example, property speculation will continue to be seen as a one-way bet, morally bankrupt governments will continue to blow housing bubbles for electoral gain, and every other aspect of the economy will continue to suffer as the blood is drained from it to maintain this cancerous growth.

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Some promising bits, but I was very disappointed to read this:

We've been seeing this nonsense spouted for over a decade. It's trite, lazy and dangerously disingenuous. I get that the writer is terrified of spooking the cattle by threatening their all-important nominal equity. But this country will never, ever break out of its housing psychosis so long as the government is perceived as guaranteeing nominal prices. It's like trying to get someone to stop gambling: OK, we'll let you keep all your winnings, and compensate you for any losses, but really, this isn't good for you...

Unless the clear and present danger of nominal falls is burned into the public consciousness by clear example, property speculation will continue to be seen as a one-way bet, morally bankrupt governments will continue to blow housing bubbles for electoral gain, and every other aspect of the economy will continue to suffer as the blood is drained from it to maintain this cancerous growth.

Agreed. But what is being suggested is a stupid notion anyway. There is no way the gov could ever engineer it. Bubbles are inherently unstable. They either inflate or deflate. They don't stand still.

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Agreed. But what is being suggested is a stupid notion anyway. There is no way the gov could ever engineer it. Bubbles are inherently unstable. They either inflate or deflate. They don't stand still.

Maybe it's my London bias, but the 2007 bubble seemed very much to stand still in nominal terms until the current insanity kicked off. The government and BoE accepted devaluation and general inflation to protect nominal house prices.

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The market would provide

What a crock of sh1t that nonsense turned out to be.

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I think Thatcher's major failure was to encourage the sale of municipal housing yet forbid councils from building more houses... No-one else was willing to build social housing: developers would rather build more profitable executive pads....

Couple this with liberalised credit controls and we are where we are ... massive house prices.... Nice for those already with houses, a disaster for the rest... and it has led to a debtor society which cannot be reversed without a lot of pain and is never going to happen for electoral reasons.... [i know I'm singing to the choir here but nevertheless ;);)

Perhaps it was not her intention... it's fairly well documented her vision of Britain was of a property-owning democracy of savers with moral restraint... instead, she got indebted spendthrifts... ironically, she wanted the British people to be like her father... but they turned out more like her son.... :lol:

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One of the problems which exacerbates the housing mania is the way the benefits system is set up. you can own a home but have any significant savings and you can forget benefits.

Our current system drives all the wrong behaviors. You may as well spend all your money on coke and hookers and rent.

I would rather you have a system where there is one allowance for all your assets, under that figure you get benefits over that figure benefits taper. I would make this allowance quite generous to encourage saving rather than wastefulness.

I would also end any distinction between paying a mortgage or renting, there should be one housing allowance. This would be set on an increasing scale based on the number of adults in the household, children would not be counted as again that drives costly behavior.

Of course all this messing about could be avoided with LVT coupled to citizens income.

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I thought that New Labour would end Right To Buy a decade ago when house prices went up along with housing waiting lists. Tubby Prescott did cut the discounts for those doing RTB which was no more than a half-measure.

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The other things that Thatcher said she wanted to promote as well as property ownership were things like the enterprise economy and pensions and savings.

Enterprise economy meant businesses in things other than property and that government often said it was concerned at all the investment going into house prices to the detriment of the rest of the economy - one of the reasons they started to scale down MIRAS then and which helped to trigger the 80s/90s house price collapse.

Then John Major was in power for a few years and house prices increased a bit towards the end of his time but not by spectacular amounts by any means.

After 1997 Labour reversed the focus back to house prices (house prices not housing) and attacked pensions probably to help to funnel savings into house prices. The LibDem/Conservative coalition have pretty much carried on Labour's crazy house price policy despite election promises (certainly promised by the Conservatives) to rebalance the economy and encourage savings.

Edited by billybong

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It's rubbish to say that Thatcher started the 'obsession'. Vast numbers of houses for relatively ordinary people to buy were built in the 1920s and 30s. In almost any suburban area you will see whole streets of them. If people hadn't wanted to buy them, the builders wouldn't have built them. Both my sets of grandparents were buying their own homes in the 1920s, and they were by no means well off people.

The building society movement - whose very existence evidences such a desire - goes back a lot further.

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It's rubbish to say that Thatcher started the 'obsession'. Vast numbers of houses for relatively ordinary people to buy were built in the 1920s and 30s. In almost any suburban area you will see whole streets of them. If people hadn't wanted to buy them, the builders wouldn't have built them. Both my sets of grandparents were buying their own homes in the 1920s, and they were by no means well off people.

The obsession with prices, not housing as such, and the notion that increasing house prices meant you were more wealthy hence its popularity. This ties in with deleting manufacturing and moving to an economy whereby GDP growth was somehow associated with selling things for eg shares and houses or bits of paper even back and forth amongst ourselves in a spiral of increasing prices, that is the increase in price was somehow associated with GDP growth. The bit they didn't ever mention that with this magic 'growth' the bankers were creating more debt needed for borrowers to push up prices of everything. In the long run the banks now hold via mortgages and other loans a much bigger share of UK housing in particular than they did back pre Thatcher times.

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What a crock of sh1t that nonsense turned out to be.

Yes 'The Market' is a collection of self serving C U @ ts who at the upper levels (the ones that have the governments ear) dont like level playing fields nor real market forces, hence we have everything working against us re house prices, building and job security needed for a mortgage etc. I think the closest we get to 'The market' is crony capitalism at best or more like a mafioso economy.

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I blame Facher for selling but not building social housing, but that's as far as it goes.

I recently re-read "The Old Wives Tale" and, over 150 years ago, housing as the main middle-class asset was in full flow. It's not the theme of the book as such, but it surprised me how much it came up that, as soon as anyone had any money, they piled it into BTLs.

It would appear that many things never change - e.g.

After stipulating for the new window, she closed with the offer. Then there was the stock-taking, which endured for weeks. And then a carpenter came and measured for the window. And a builder and a mason came and inspected doorways, and Constance felt that the end was upon her. She took up the carpet in the parlour and protected the furniture by dustsheets. She and Cyril lived between bare boards and dustsheets for twenty days, and neither carpenter nor mason reappeared. Then one surprising day the old window was removed by the carpenter's two journeymen, and late in the afternoon the carpenter brought the new window, and the three men worked till ten o'clock at night, fixing it. Cyril wore his cap and went to bed in his cap, and Constance wore a Paisley shawl. A painter had bound himself beyond all possibility of failure to paint the window on the morrow. He was to begin at six a.m.; and Amy's alarm-clock was altered so that she might be up and dressed to admit him. He came a week later, administered one coat, and vanished for another ten days. Then two masons suddenly came with heavy tools, and were shocked to find that all was not prepared for them. (After three carpetless weeks Constance had relaid her floors.) They tore off wall-paper, sent cascades of plaster down the kitchen steps, withdrew alternate courses of bricks from the walls, and, sated with destruction, hastened away. After four days new red bricks began to arrive, carried by a quite guiltless hodman who had not visited the house before. The hodman met the full storm of Constance's wrath. It was not a vicious wrath, rather a good-humoured wrath; but it impressed the hodman. "My house hasn't been fit to live in for a month," she said in fine. "If these walls aren't built to-morrow, upstairs AND down—to-morrow, mind!—don't let any of you dare to show your noses here again, for I won't have you. Now you've brought your bricks. Off with you, and tell your master what I say!"

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