During a recent radio show appearance PrimeLocation.com was corrected on a small but significant piece of property history by the London Evening Standard’s no-nonsense planning correspondent, Mira Bar Hillel.
The mistake had been to claim that Margaret Thatcher (pictured above, before she became Prime Minister) and her 1979 Conservative government had sparked the home ownership revolution that rumbles on today.
Mira, shaking her head vigorously from across the studio, pointed out that it was an earlier Tory administration, not Thatcher’s. Instead, in 1957 Harold Macmillan abolished rent controls and it was this, after rents subsequently soared, that persuaded millions of us to embrace ownership.
Even though Mira was right to assert this, for many people Margaret Thatcher’s ‘right to buy’ council homes scheme (brought in soon after her 1979 victory) was a seminal moment in Britain’s property market, enabling some two million or more people to buy their local authority homes, often at a very substantial discount.
But as many of us queue to see the film Iron Lady starring Meryl Street (pictured above), how has the property market changed since her triumphant, ‘the lady’s not for turning’ speech?
Like today, the economy was in difficulties and Thatcher had to bring in harsh policies to correct the downturn. Nevertheless, in those days first time buyers required just £25,000 to get on the property ladder (compared to £155,000 or so today); a million pounds bought a huge 2,000 acre country estate; and mortgage rates were running at 17%, something we haven’t had to endure this time round.
According to agent Jackson-Stops & Staff, wealthy commuters could buy a good six bedroom family home in the stockbroker belt of Surrey with an acre of garden for £250,000 – today it would cost over £2 million.
And Dawn Carritt, who heads up JSS’s country house department, also remembers how “loans would not be considered for anything more than two and a half times a person’s salary” and mainly came from building societies and that only a few years before women would have needed to get their father’s or husband’s consent to get a mortgage in their own name.
Tax was also in its own bracket in the 1970s, as many rock stars famously grumbled about at the time – including Mick Jagger. Inheritance Tax (then known as Capital Transfer Tax) was 75% and income tax for high earners 83 per cent, though it was reduced by Thatcher in 1979 to 60 per cent. Basic rate tax was 33 per cent but fell to 30 per cent in the first Thatcher budget.