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Property ownership is a good thing. It is good for people to own, and it is good for people to aspire to own. Saving to buy a home is a great motivator for future planning. Of course, young people will only save if the goal of home ownership seems achievable.

This is something all Conservatives can agree on. If it is a good thing then it is something that should be promoted. The Coalition has brought in some measures to help first-time buyers get on the property ladder, but more still needs to be done. This is why earlier this week Bright Blue hosted a meeting with top policy makers to discuss what the Conservative’s flagship policy on housing should be in the 2015 Manifesto.

The case that something must be done
Tackling the affordable housing crises should be a key part of any manifesto. It is one of the main policy areas young people will be considering when deciding who to vote for, or whether to vote at all. The statistics scream that something has to be done. Ipsos Mori found that over 80% of each young people want to own their home, but just 25% of under 35s do. Home ownership is at its lowest level since 1990. 65% of the population is a homeowner, down from 71% in 2003. This is the first decline in history. The average price of a house has increased by 250% since 1950. To put this into perspective, if a chicken had increased by that amount your Sunday roast would cost £51.18. Like Usain Bolt the growth in house prices has pulled away from growth in wages. Today, the average price of a house is 4.5 the average salary. In 1999 the ratio was 3. First-time buyers need to stretch themselves to financial breaking point. They need to take bigger loans, thus become more susceptible to the harm caused by raising interest rates. This makes it harder for the Bank of England to reward savers by raising interest rates. If you want to work out how long it will take you to save a big enough deposit to buy a property, Shelter has created a nifty calculator.

If nothing substantial is done, the Joseph Rowntree Foundation predicts that the number of young people owning their own properties in 2020 will decrease by around 1.1 million to 1.3 million. There are some who believe that it is fine if Britain move towards a continental model where less people own, and more people rent. This academic opinion is detached from the emotional reality that most Britons aspire to own their castle. To be fair, the Minister in charge of planning, Nick Boles, does understand this: “No aspiration is more deeply embedded in the British psyche than the desire to own your own home.”

Why has this situation been allowed to develop?
Building houses is easy, it’s the politics that’s difficult. The rise in house prices is one of the main causes of inter-generational poverty, so it would be good to stop this. Except those who own houses like it when it increases in value. Only 10.6% of the UK is classified as being urban, so there is plenty of space to build on. Except the areas where people want to live is the green belt surrounding our metropolitan centres, and there are always protests against building on the green belt. Many older people live in homes that are bigger than their requirements, so they should be able to downsize. Except there are not enough bungalows and the tax burden makes such a move financially foolish. Building a Garden City or two would create much needed new communities in the South East, at no extra expense to the tax payer as the Treasury will recoup everything it spends. Except those who live where a Garden City might be built are likely to object.

Make solving the home ownership an election winner
The 2015 election will be a close one. This means that voting matters and being vocal about what you care about matters to politicians. At Bright Blue we will continue to campaign to make sure the housing issue gets the prominence it deserves. Over the last 20 years not enough new homes have been built. There is no easy answer to the housing problem, but finding the solution will create great rewards, both economically and culturally.

Nick Denys is co-editor of Platform10.org, co-host of the House of Comments podcast, and a member of Bright Blue.

Follow Nick on Twitter.

Further reading:

  • Paul Kirby: A simple idea to sort out the housing market and make the economy boom for the next 5 years
  • Alex Morton: How to build better homes – for both younger and older people
  • Daniel Knowles: 15 facts that reveal the utter insanity of Britain’s housing market
  • Tim Montgomerie: We need more homes, not easier mortgages

 


Views held by contributors are not necessarily those of Bright Blue, as good as they often are.

If you are interested in contributing please e-mail blog@brightblue.org.uk or tweet @jonathanalgar.