Right-to-buy: A hand up and a way out

For thousands of council tenants, the right-to-buy scheme provided a stake in the property market - and the route to a better area. Now there are plans to slash the tenants' discount. Catherine Pepinster counts the cost of the big buy-up

It was always easy to spot a council house bought under Margaret Thatcher's right-to-buy scheme. Twenty years ago, the tenants who became proud owners of their homes wanted to quickly make their mark. The uniform looks of local authority estates disappeared and in their wake came double glazing, heavy wooden doors, Georgian windows and, even – this being the early Eighties – stone cladding. Long-standing tenants who secured a house for just £14,000, thanks to their eligibility to a substantial discount, flocked to B&Q and Homebase to buy paints and power tools.

Since then, those owner-occupier pioneers have been followed by thousands more who have claimed the right to buy terraced houses, semis and flats from their local authorities. But now in London and the South-east – areas where prices have soared by as much as 400 per cent in the past two decades – the right of tenants to buy their council house is to be restricted. Deputy prime minister John Prescott announced last week that discounts given to tenants who buy their homes are to be halved. The move will apply at first to 42 housing areas in London and the South-east and discounts will be reduced from £38,000 to £16,000 in March.

One reason why the Government wants to deter right-to-buy is the difficulties that key workers in the capital – such as teachers and nurses – are having in buying their own flat. Despite special deals to help NHS workers, most still find they cannot afford to buy a home of their own. And with rents for a three-bedroom house running at more than £1,200 a month in many parts of London, a staff nurse on a salary of £22,000 is finding that impossible, too.

But for those who have bought their house, and tenants who are considering the option, the right to buy has proved an unbeatable opportunity for self-improvement. And it also means that their families have benefited too, enjoying prosperity they would never have imagined.

Twenty years ago, I visited two of the most popular estates for the right to buy scheme. What has happened to those neighbourhoods since then provides a fascinating insight into how a government policy can not only change the lives of those immediately affected, but an entire neighbourhood as well.

East Acton is not a particularly salubrious part of London. It lies just off the A40, hidden away behind a constant stream of traffic heading for the Westway and the West End. It is surrounded on three sides by two hospitals – the Central Middlesex and Hammersmith (home to the fertility expert and TV presenter Lord Winston) – and a prison, Wormwood Scrubs. It is divided in two by Old Oak Common Lane, on one side of which is an estate of semis within the London borough of Ealing and, on the other, a collection of mainly terraced cottages within the borough of Hammersmith and Fulham. Once upon a time, these homes housed families, many of them headed by workers from the hospitals, the nearby industrial estates and the railways. They were steady, hard-working people, many of them related to each other, whose parents and grandparents had first moved in when the houses were built between the wars.

It is easy to imagine the pleasure these families felt when they moved into the newly built houses; the Ealing borough roads, with names like the Green and the Fairway, recall the former golf links on which they were built. They were solidly built houses, handed over to the council by a developer who ran out of money. Some of his houses were sold off to private owners, so the Ealing estate was always a mixed one. Then came the right to buy, and the council tenants flocked to register their wish to acquire their own home.

Among them were Ken and Daisy Kentish, who bought their house for a few thousand pounds. Daisy Kentish has lived in the house for most of her 57 years. "My father waited years and years to get this house," she says of The Fairway terrace that she and her husband acquired after taking over the tenancy when they moved in to look after her father. "My parents must have paid for this house over and over by paying rent for it all these years. We don't regret deciding to pay for it at all. When it is your own house, you really look after it and improve it. When it is the council's you are not allowed to do anything."

Today around 80 per cent of the houses on both side of Old Oak Common Lane have been sold off through the right to buy scheme. Properties that sold for around £15,000 to long-standing tenants are now worth around £300,000-£350,000 for three bedroom terraces with large gardens. What is noticeable about the area is that so many of the original right-to-buy owners are long gone. Some cashed in on their good fortune as soon as they could – five years after buying their houses, in order not to lose their discount – and moved to another neighbourhood nearby. Others retired, some to the coast, others to Ireland, from where many had emigrated years earlier. Some have died, leaving a substantial inheritance to families who have never experienced prosperity before. Jay Ladwa, a local estate agent, has dealt with many of the sales through his company, Hart and Co. "Some of the people who bought early on wanted to move quickly because to them, the property was still a council house. They felt it was a stigma, and went elsewhere, usually quite local," he explains. "Whenever people asked me whether they should buy, I always recommended that they did. They could not lose. As soon as they bought, the property went up in value."

The proximity to the A40 and a Tube station – East Acton, on the Central Line, with a journey time of just 15 minutes to the West End – made the houses very attractive to buyers, and later, to investors. Today, many of the houses are in the hands of property companies and individual buy-to-let landlords. The estates, which were once stable communities, are now places dominated by transitory populations. Students, workers from overseas and temporary staff working at the nearby hospitals are among those who have moved in.

"The location appeals to young people," says Ladwa. "Before right to buy, this was a white English area; an older generation who had grown up here, lived here. Now it is culturally diverse, and much younger."

Dave Dean and his sister Brenda have lived in the neighbourhood most of their lives, and have seen their street, St Andrew's Road, change dramatically in the past 20 years. As original owner-occupiers, they could understand why council tenants wanted to buy, but they regret the passing of the older, more stable community of East Acton. "There was a real sense of belonging here. People knew one another; many of us were related to other residents living nearby. That has changed; these are not estates for families any more," says Dave Dean.

Nearby, in Muirfield, Connie Pinnock is one of the few council tenants left. Her late husband, she says, never got round to buying their home. "I regret it, of course," she says, "when I see how much these houses are worth. There is no likelihood of me ever being able to have that kind of money in any other way. But I don't like the way the estate has changed. I used to know all the families in my road. Now I only know four out of 24 houses."

One of the major ironies of the fallout from right to buy is that housing associations are among the organisations buying the former council houses when they come onto the market. They acquire them to let them out to tenants needing affordable housing – often people nominated by London boroughs from their own waiting lists.

Other properties, once lived in by families, are now being rented out to young people sharing a house, and these private tenants include nurses. "I can't remember the last time I sold a house to a nurse from the local hospitals," says Ladwa. "But they can afford them if they group to together and rent."

"Sometimes they come into my office wanting to buy, and think because they are former council houses, they will be cheaper. But in today's market, the fact that a house once belonged to the council is irrelevant. People don't care about that. What they care about is that the house is solidly built, it's got good-sized rooms, and above all, it's near the Tube. As usual, it's location that really matters."