When a HOUSE cost less than a pint of beer!

EWAN LAMB on the 25th anniversary of the Borders 'sale of the century'

A quarter of a century ago this month the finishing touches were being applied to a sensational deal which would see 120 publicly owned rented homes in Galashiels being sold to a housing association for the equally sensational price of £1 apiece. At that time a pint of lager cost £1.35p.

It was to become known as a veritable Sale of the Century accompanied by a huge dose of political fall-out, allegations of "grubby, underhand dealings" and claims that valuable assets had changed hands for sweetie money to serve the ends of the Conservative Government's housing policies.

Those 120 houses and flats - some with gardens - were situated in the Langlee area of town, in Woodstock Road, Woodstock Avenue, Langlee Drive, Langlee Road, Langlee Avenue, Kenilworth Avenue, Marmion Road and Talisman Avenue. But the £1 selling price remained a closely guarded secret until the transactions showed up on the national property register.

In all 1,190 tenanted homes in six Borders towns were targeted for sell off by Scottish Homes, the government quango established as a national housing agency in 1989.

The open market value of the houses was estimated to be £35 million, but because they came complete with sitting tenants, and many of them required sizeable financial investment they eventually went for a knockdown price. It was the first housing stock transfer of its type north of the border.

The saga began in 1988 when the newly formed Waverley Housing Trust under the chairmanship of former Scottish Office minister Michael Ancram was awarded the management contract for the hundreds of public sector dwellings. They had previously been factored by the four housing authorities in the Scottish Borders at a price which was below that of Waverley's bid.

Another Scottish minister Lord James Douglas-Hamilton assured the House of Commons in November 1988: "The proposed arrangement between the Scottish Special Housing Association and Waverley Housing Trust does not include a commitment on future purchase of the housing stock. Any such proposals would require the consent of the Secretary of State for Scotland".

But not long after that Commons debate the wheels were set in motion for the sale of the houses to Waverley with Scottish Secretary Ian Lang eventually sanctioning the deal in 1992.

As the records show, the properties carried individual price tags ranging from £1 to £12,131 resulting in an average transaction of just £4,201 and a total yield to Scottish Homes of £5 million.

The sense of outrage among local councilors and politicians intensified after it emerged that identical houses to those sold for £1 but in different ownership were valued at up to £30,000 each. And in 1992, only weeks before the deal was concluded, Scottish Homes sold a house on Kenilworth Avenue to a sitting tenant for £13,200 after the full 50% discount available to tenants was deducted.

The bundle of £1 houses had, in fact, been given negative valuations of minus £622 each, apparently because of their poor state of repair, the presence of tenants and the need to maintain the houses for social rent.

Charlie Anderson, the chief executive of Ettrick & Lauderdale District Council at the time declared: "I think people will find it absolutely astonishing that assets which were paid for by the public purse should be handed over to a private company for sweetie money".

The matter became the subject of a National Audit Office investigation in 1994 after irate MPs including the then David Steel and John Home Robertson raised questions in the Commons.

Following the publication of a Public Accounts Committee report Labour MP Michael Connarty (Falkirk East) claimed: "It is not right that a Government should do deals in such dubious circumstances.

"The report says that there were six meetings between senior Government officials and the people who were to become Waverley Housing Association at which no minutes were taken. It was clearly a little behind-the-door arrangement - and a lucrative one for the people who set up Waverley."

Today, houses in the twenty shilling streets of Wester Langlee South regularly change hands for £60,000 which must represent a phenomenal rate of inflation over 25 years. Even in 2002, a decade after the £1-a-time properties found new owners prices of between £30,000 and £40,000 were being achieved on Woodstock Avenue.

There is no doubt that the wheeling and dealing on the Borders housing front in 1991/2 sparked a revolution in Scotland's social rented housing sector.

As Michael Ancram observed when Waverley was handed the Scottish Homes management contract in April 1989: "I have been saddened by the irrationality of some of the reaction after this pioneering venture arrived on the scene. I forecast that many more alternative landlords will be established within a few years".