Thatcher's slow-motion housing timebomb

James Meek's essay "Where will we live?" is a detailed, passionate history of the housing timebomb that is detonating in England today. Thatcher set the time in the 1980s, when she sold off public housing to tenants and forbade local governments from building more with the proceeds, and subsequent governments have done everything they can to fuel and intensify housing speculation and bubbles. And now single moms, disabled people, and elderly people are being evicted, families can't afford housing on anything less than a banker's salary, and pensioners are being doomed to decades of poverty by low interest rates that can't be raised, lest they burst the property speculation bubble.

Housing in the UK is a microcosm for everything wrong with neoliberalism: corruption, cronyism, grinding human misery, and funny accounting to prove that it's all working, honestly.

What you think the Thatcherites expected to happen once they'd set Right to Buy in motion depends on how cynical you are about their motives. The most benign view is that they thought supply and demand was a straightforward elastic law, and that the market would take up the slack: private housebuilders would build more homes, for both sale and rent, as the number of new council houses being built waned. A dwindling number of the poorest people would be catered for by residual council stock, by the non-profit housing associations – which would still get state grants to build houses for the less well-off – and, for those who were really hard up, by an obscure welfare top-up called housing benefit…

…In the 1980s, as the construction of new council houses shrank to almost nothing, there was a slight rise in the number of private homes being built, peaking at around 200,000 homes a year at the end of the decade. Then it fell back – and stayed fallen. Between the early 1990s and the onset of the financial crisis in 2008, supposedly a boom time in Britain, the number of new private homes built each year didn't go up. It barely budged from the 150,000 a year mark. The market failed. There was increasing demand without increasing supply. Mid-boom, as the imbalance between the number of people chasing a house and the supply of new homes reached a tipping point, average house prices took off like a rocket, trebling between Tony Blair's accession and the 2008 crash. (In Tower Hamlets, prices went up three and a half times.) Even allowing for inflation over that period of time (36 per cent) it's a terrifying increase.

The chart only shows part of Right to Buy's drawbacks. Those tenants who didn't buy their houses, either because they didn't want to or because they couldn't afford to, had their rents jacked up. At the same time, because of the growing shortage caused by the inability of councils to build, the failure of private builders to build enough, and weak government support for housing associations, rents in the private sector went up. The poorest and most vulnerable members of society, the sick, the elderly, the unemployed, single mothers and their children, were shared between a shrinking stock of council housing – the council housing least likely to be sold, that is, the worst – and the grottier end of the private rental market.