Post War Housing Policy
Post War Housing Policy
"Council housing succeeded not only in dramatically raising the standards of housing for working families, it also raised the general standard of house building through the introduction of building standards (Parker Morris), which became the standards of demand in the owner occupied sector.""The lesson of history is not that council housing failed, but that its success was made vulnerable by the failure to adapt it to the changing need of the population as a whole."
A Period of Success
The results of war had left UK Housing in a parlous state. With no building development for 6 years and 20% of pre-war buildings destroyed or badly damaged. 57% of the population lived in private rented accommodation and 10% in council houses. The post war government embarked on a determined building programme.
In spite of the shortages, house prices stabilised a year after the war and remained within a narrow band of 0-10% and approximately inline with general inflation for the next 25 years. While the UK led the world in to the development of national health services, it chose a system of improvement in housing, which remained unique.
In 1945 the Minister of Health - Aneurin Bevan stated:
“Before the war the housing problems of the middle classes were roughly solved, the higher income groups had their houses, the lower income groups had not. We propose to start to solve the housing problems of the lower income groups. The emphasis of our house building programme will be housing to let, that means we shall ask local authorities to be the main instruments for the housing programme”.
He went on to say the main disadvantage of such a policy was that,
“You have colonies of lower - income groups living in houses provided by the local authority and you have the higher income groups living in their own colonies, this segregation of different income groups is a wholly evil thing from a civilised point of view”.
While the danger was recognised, the imperative to provide “Homes for Heroes” could be more certainly achieved by the control of local government.
You Never Had it so Good - Macmillan 1959
In 1945 most of the population lived in privately rented houses, often in near slum conditions. Today, many grandparents can recall a childhood lived in a "two up, two down", cold water, gas lights, no electricity, tin bath hung on the wall and an outside loo. The mood of the population was very much influenced by a determination to make good the failed promise of “Homes for Heroes” that following the end of World War I.
The Labour government began the reform in every sphere of people’s lives. The ideas of “Homes for Heroes” and the “Welfare State” represented common values, which became shared in the policies of successive governments. The policy for housing provision included tax subsidies for house buyers. But more importantly, for the majority of working class families, a programme of investment in rented council house accommodation.
Local Authorities were the chosen instruments of policy, but the initial subsidy on investment was the important principle that brought decent standards of accommodation to most of the population and resulted in a numerical equality between houses and households by 1969.
Council housing succeeded not only in dramatically raising the standards of housing for working families, it also raised the general standard of house building through the introduction of building standards (Parker Morris), which became the standards of demand in the owner occupied sector. Such council led standards included central heating, space and bedroom standard, upstairs bathroom and downstairs toilet. By 1969, most of the city slums had been cleared and the supply of housing over households was at last in surplus.
Falling Subsidies
By the 1960s, the subsidies required to establish the rented stock had fallen to a level similar to the subsidies for homebuyers. The 1967 Housing Subsidies Act changed the basis of subsidy from fixed rates to a subsidy of the difference between the building rate of borrowing at 4% and the market rate of borrowing from the Council pool (typically 6%), a mechanism not unlike the subsidy to homebuyers. Although this actually raised the subsidy, a parliamentary question in 1968 revealed that the annual subsidy for 5.5 million council houses was £157 million, while mortgage rebate subsidy for the 9 million private stocks was £300 million (i.e. £28.5 per council house and £33.3 per private house). [1]
The housing stocks were capable of supporting significant building programmes, while maintaining low cost-balanced rents within the range of most low-income families and the costs were still falling.
The Failure to Develop and Reform
With increasing affluence for many families, council housing was a springboard to home ownership. Many, if not most of the children brought up in council houses, moved on to become homeowners. In Europe, a similar low cost rented sector emerged, but with a much more varied combination of resources, which included the efforts of trade unions, churches and other associations. The structural monolith of council building began to show its disadvantages. Very large council estates, tower blocks in the cities and restrictive letting policies contrasted with the variety of choices available for home ownership. From the 1960’s, the welfare characteristic (residualisation) of council housing began to develop as a stigma from which home ownership was the natural escape.
Political Divisions
The local rates, included as a source of early subsidies for council housing, caused political division. Councils were protective and restricted access on the grounds of income and residence. Building programmes were restricted to supply only for the deserving needs of the local poor. This attitude was the engine of residualisation and the architect of social divisions, which still maps the structure of small towns in Britain.
The division between council tenancy and home ownership became engrained as a unique characteristic of British culture. In European economies such as Germany, Belgium and France, the rented sector is more varied and home ownership has been a more classless secondary or even tertiary need within the environment.
As the division became politically entrenched, the restrictions were applied even in those areas where cost balanced rents were now being approached. By 1970, there was no justification for restrictions on the grounds of subsidy, except in the cities, where the cost of scarce and commercially pressured land was prohibitive.
For Labour, these difficulties meant that insufficient council houses were available and they faced the paternal attitude that tenants should be grateful to gain access to lists with long waiting periods. For Conservatives, there was a growing electoral problem of Labour-rich voting on council estates. But more significantly, as a result of restricted access and the social isolation of large estates, council houses were beginning to assume a welfare role; the process of residualisation had begun.
In addition, there was a growing national problem for the mobility of labour, due to the decline of private tenancies and the restricted access of council houses.
The policy of provision was beginning to fail in terms of growing social and political divisions and public confusion about subsidies. The original concepts of council housing as a national resource of rented accommodation, was in need of reform. As proof of the potential for reform, these pages show that the capacity for development towards open access and the reversal of socially divisive policies was possible on balanced budgets, with the example of policy in Colchester between 1971-74.
But Labour failed to take the opportunity in the 1960s and a radical reform with quite different intentions was conceded to the Conservatives. It began in 1972, with the introduction of the Fair Rent Act, even more decisively by the Right-to-Buy Act in 1980 and by deregulation of the housing market in 1988.
