Government intervention in the housing market: what works?
Nevertheless, government intervention may not always be misguided. I’m currently half way through writing a book on the Right to Buy (RTB), the policy introduced in 1980 allowing council tenants to buy their dwelling at a discount. In many ways the RTB can be seen as one of the most successful policy interventions of the post-war period in that it actually achieved all of its main objectives, particularly the extension of owner occupation to working class households, the inculcation of personal responsibility and the reduction of state provision.
Over 2.2 million households have benefited from the RTB over the last 30 years and, despite some recent calls for its abolition from parts of the left, the policy seems unrepealable. Therefore it can certainly be seen as a success.
Yet, the RTB was itself a form of social engineering. It was a top-down policy imposed by central government on reluctant local councils. We might legitimately argue that the policy was popular, but does this justify the intervention? Is the RTB acceptable because of its outcomes, or because of the motives of the government which enacted it? Is it the type of intervention that matters, or should the RTB be seen as just as illegitimate as the Brown government’s mortgage rescue schemes?
The RTB clearly has transformed millions of people’s lives for the better. But this was because of government intervention. Perhaps, therefore, what we ought to be looking for is some means of determining which forms of government intervention work and which do not.
Peter King is the author of Choice and the End of Social Housing.