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Rifah Isa

October 4th, 2024

How Housing Reforms Reshaped a London Borough

0 comments | 1 shares

Estimated reading time: 10 minutes

Rifah Isa

October 4th, 2024

How Housing Reforms Reshaped a London Borough

0 comments | 1 shares

Estimated reading time: 10 minutes

Did housing reforms lead to a dramatic population decline in one of London’s most iconic boroughs? Rifah Isa investigated the effects of the ‘Right to Buy’ scheme on the social and demographic makeup of the borough of Westminster. Her findings highlight the devastating impact of the reforms on the borough’s low-income residents and offer a warning about the unintended consequences that may follow from housing policies that favour privatisation. 

Between 1970 and 1990, the population of Westminster declined by over 20%. Housing reforms directly influenced the borough’s population decline. Neoliberal reforms, most notably the ‘Right to Buy’ (RTB) scheme, reduced public housing and displaced thousands of lower-income residents. These policies favoured wealthier homeowners at the expense of less well-off residents. The housing reforms deepened socio-economic divides and the led to the exodus of many Westminster residents.  

 

Housing Reforms That Changed Westminster

The UK government, led by Prime Minister Margaret Thatcher, introduced the Right to Buy scheme in 1980. The scheme’s stated aim was to create a “property-owning democracy” by allowing council housing tenants an opportunity to buy their homes at a subsidised rate. The scheme succeeded in boosting homeownership for those able to afford the cost of buying their property.

The Right to Buy succeeded in transferring council property to private owners. Between 1984 and 1985, for example, the number of council dwellings sold under the scheme surpassed expectations by 34 per cent. However, for residents unable to buy their property, the cost of renting rose. Built into the success of this scheme was a process of rapid privatisation. And, as the supply of public housing decreased, the cost of rents increased, forcing many residents to find housing in cheaper boroughs. By 1990, Westminster had lost 15% of its council housing, displacing over 5,000 lower-income residents.

The “Homes for Votes” scandal, which involved the strategic manipulation of housing policies to influence the 1990 local council election results, tipped the scales further in the favour of wealthy residents. Council leaders prioritised housing for individuals more likely to vote for the Conservative Party, who were typically wealthier residents. These actions increased the displacement of lower-income residents. The displacement decreased the democratic voice of the working class in local elections, leading local officials to cater to the desires of affluent residents rather than addressing the need for affordable housing.

 

Population and Housing Trends 

The impact on Westminster was enormous. The borough’s population plummeted from 225,900 to 179,800, a decline of over 20% because of the housing reforms of the 1980s. The reforms transformed public assets into private ones. Council-owned units peaked in 1981 at 21,368 before falling to 16,945 by 1991. Meanwhile, the number of owner-occupied units increased from a low of 6,789 in 1961 to 29,180 by 1991.

The 15% decrease in Westminster’s public housing stock between 1980 and 1990 displaced over 5,000 lower-income residents. Most of the displaced residents moved to less affluent boroughs through the Greater London Mobility Scheme.

 

The Winners and Losers of the RTB scheme

Westminster’s housing reforms changed where people lived, and divided community members into winners and losers. On the winning side were higher-income individuals and families who bought property at significant discounts and increased their wealth.

Those losing out were the lower-income residents. As public housing stock dwindled, rents rose and forced many lower-income residents to move out of the borough. Employment patterns reflect these shifts . Residents with higher-income jobs in finance and business services increased by 20.17%, while residents with jobs in manufacturing and construction decreased by 4.48%. This structural change to the local economy left many working-class families struggling to find affordable housing and stable employment in the area.

 

The Effects of the RTB Scheme Today

Westminster’s housing reforms from the 1970s and 1980s have had an enduring effect. The RTB scheme had the unintended consequence of deteriorating the borough’s housing quality. Today, 80% of Westminster’s neighbourhoods rank in the lowest decile for housing conditions across England.  Many properties bought by renters under the RTB scheme were quickly resold to property management firms who often failed to invest in maintenance and upgrades. Many buildings have fallen into disrepair, creating unhealthy living conditions for residents.

Homelessness is also connected to the rapid privatisation of public housing. The RTB scheme reduced the supply of affordable public housing, drove up rents and left those without a financial or social safety net to resort to rough sleeping. Today, Westminster accounts for 25% of all rough sleepers in England.

The landscape of homeownership has also shifted. Homeownership rates have fallen from 30.5% in 2011 to 27.4% in 2021, while private rentals have risen from 39.7% to 43.3%. As property management firms have taken more of the housing market, the dream of a “property-owning democracy” has not materialised. Demand for tourist accomodation has  increased the affordability crisis for renting residents, since many landlords favour the profits of short-term rentals over long-term rentals.

 

Conclusion

Westminster’s population decline from 1970 to 1990 was no accident. It was the consequence of housing reforms that favoured the wealthy and displaced the poor. Westminster’s story is a powerful lesson about the unintended consequences of housing policy. It shows how past decisions impact communities today in both intentional and unintentional ways. Understanding this history should encourage future policymakers to ensure housing reforms benefit all residents, not just the privileged few.

 

Image credit: Image of Page Street social housing block by . Licence: https://creativecommons.org/licenses/by/2.0/

About the author

Rifah Isa

Rifah Isa completed her BSc in Economic History and Geography at LSE in 2024. She is currently a National Management Trainee with the National Graduate Development Program, working for the City of London Corporation.

Posted In: Housing | Student Research