The idea that the so-called ‘property-owning democracy’ is, if not dead, then dying, is now almost treated as established fact. Members of the self-styled ‘generation rent’ are especially vocal, claiming that they might as well spend their paltry earnings on short-term pleasures, as home-ownership will forever be out of reach. There is even a culprit: we baby boomers are accused of clinging to big homes that we bought for a supposed pittance, made a mint from, and now refuse to vacate gracefully, even as we extract equity to fund our luxury lifestyle.
Well, I am sorry, but this is a travesty – particularly the harnessing of housing to the popular, but pernicious, concept of a ‘generation war’. If anyone is suffering from present financial realities it is the ‘oldies’ and upcoming ‘oldies’ who receive next to no return on the savings successive governments told them to accrue for their retirement, even as they must look forward to selling their homes to cover savagely means-tested care costs.
In fact, it would make sense, given all the competing pressures, for them to plunder their pension funds or release equity from their houses, less to repair the roof or cruise the world, than to help their grandchildren to buy a home. Hang on a moment, though, financial firms are worried that so many are already doing this that they could run out of money in their dotage.
So, the supposed generational war in housing is nothing of the kind. It is the old war between those families that can and will help their offspring to buy somewhere, and those who cannot.
But the whole argument about the ’property-owning democracy’ needs to go back to first principles. Was there ever such a thing, really, as a ‘property-owning democracy’ in the UK and, even if the term carries conviction , was it necessarily such a wonderful thing?
The millennials’ grievance often seems to boil down to “Woe is us, that we cannot buy our own home in our twenties”. But the time when your average twentysomething could take out a mortgage and buy a home – the heyday of the ‘property-owning democracy’ – was limited to a single recent decade, when the lax credit that funded it helped precipitate the financial crash. Not only were those years an exception – we are now back closer to the norm – but is it really so wrong that, at a time when people stay in education longer and start families later, they should also buy their first home later, too?
Yes, there is a London and South-East problem, caused in part by the openness of our housing market to foreign money and the preference of developers for building £2 million two-bed flats for investors rather than family housing. But today’s ultra-low mortgage rates need to be factored in, too. The £60,000 mortgage my husband and I were granted in the 1980s was proportionately more expensive to service than a £600,000 mortgage today. Is it any wonder house prices have risen in the places people want and need to live? The Government’s ’Help to Buy’ – ’help’ mainly for those who do not need it in raising a deposit – has only made matters worse.
To my mind, the two biggest faults in the UK’s housing market are the concept of the ‘ladder’ and buy-to-let. The first might be seen as the great enabler of the ‘property-owning democracy’. But what it has actually done is to encourage the proliferation of poorly-built ‘starter-homes’, and reinforced the idea of a home as a money-machine. If interest rates start to rise and/or prices to fall, the ‘ladder’ will become a snake. Buy-to-let, for its part, is actually the idea of the ’property-owning democracy’ run wild, thanks to tax inducements.
But it is the combination of the ambitions fostered by the ‘ladder’ and successive governments’ misguided attachment to buy-to-let that has been lethal. The result is less that first-time buyers have faced competition from potential landlords, though that happens, than that the UK’s middle earners have been deprived of something their counterparts in many European countries take for granted: a stable, sufficient and professionally-run rental sector they can afford. Instead of fixed rules and standards, they often have to deal with individuals who can throw them out on any pretext at minimal notice and who regard the property essentially as theirs.
The UK’s property-owning fetish has at once fostered a condescending attitude to renting and militated against serious corporate investment in the rental sector. For our friends on the continent, such a sector at once offers a stepping stone to ownership, and a reliable alternative of decent quality. It is past time that we had the same choice. If the 1990s property bubble is regarded as the heyday of a ‘property-owning democracy’, to be exalted and repeated, then we have got something very wrong.
Mary Dejevsky is a columnist for The Independent, The Guardian and Unherd. This article first appeared in our Centre Write magazine On the home front. Views expressed in this article are those of the author, not necessarily those of Bright Blue.
