Home-owning and the death of a British dream
Tomorrow the UK government will publish a major shift in policy, abandoning the idea that it is better to own a home of one’s own. ‘Generation Rent’ will get a huge boost. Is this sensible?
‘An Englishman’s home is his castle.’
As William Pitt the Elder said, ‘It may be frail, its roof may shake, the wind may blow through it, the storm may enter, the rain may enter – but the King of England cannot enter.’
Most British people own their own homes. This is one of the things, it is said, that makes the UK a stable and relatively peaceful place. British people have a stake in that stability: the bricks and mortar within which they live.
But this could all be about to change. Tomorrow, Theresa May’s government will publish a white paper in which more help is promised for those who cannot afford to own, or prefer to rent — by cutting rents and increasing the length of tenancy agreements.
Already some are welcoming this as a useful corrective to what they claim was an irrational British obsession with home-ownership. Mrs Thatcher developed the policy of the UK as a ‘home-owning democracy’ in the 1980s. And successive UK governments have followed suit.
But Germans, for example, have never been so interested in home-owning. The proportion of Germans owning their own homes is far lower. Instead they have tended to invest their savings in stocks and shares.
Some attribute Germany’s greater economic success at least in part to this: there has been greater availability of savings to invest in industry and that is what has financed Germany’s economic success.
Renting is also better for labour mobility. It’s far easier simply to give up a rented property if a new job takes you to another part of the country than to have to go through all the rigmarole of selling a house and buying another one.
But the shattering of the dream of home-ownership for the next generation in Britain will have some pretty bad consequences, many argue. In the place of first-time buyers, investors wishing to buy to rent will grab the properties at the lower end of the market. That will exacerbate the generational difference between the haves and have nots in the property market. Those unable to get on the property ladder will lack the security that home ownership gives them in old age. That means more may well become dependent on the state.
No cause for such gloom-mongering say others. Years of successive government policy has conned the British public into believing home ownership is the holy grail of domestic aspiration, saddling families with the burden of life long mortgage repayments. British families are now among the most indebted on earth. Household debt to income ratio is projected to hit a new peak of 172 per cent by 2020. To build a positive rental culture the British need a better deal on the table with European-style tenants’ rights at its heart.
- Is it immoral to buy a house purely in order to make a profit from it?
- Do you expect to own a home by the time you are 35?
- Class debate: ‘The solution to the housing crisis is simple: build more houses’.
- Compare the housing market in Britain with that in one other country, and write 500 words on how they are different.
Some People Say...
“A good home must be made, not bought”Joyce Maynard
What do you think?
Q & A
- This sounds like a nightmare. I don’t want to live with my parents forever!
- There are options, but all have drawbacks. You could share with friends to spread the cost of rent. Councils and housing associations supply cheaper housing to people who need it, but demand is high. You could rent a cheaper place far out of town, but that could mean spending hundreds of pounds on your commute. Or you could try and save money to get a deposit for a house of your own.
- Why are more houses not built?
- It can be very difficult to get planning permission for new houses, especially in the countryside where the default response to new buildings has generally been ‘no’. Many people have to be consulted, there are environmental concerns and it is very expensive to build new houses.
- William Pitt the Elder
- Known as ‘The Great Commoner’ because of his long-standing refusal to accept a title, Pitt the Elder was British prime minister from 1866 to 1888. Historians remember him as one of the most extraordinary orators in British history. He was a member of the Whig Party.
- White paper
- A government report giving proposals on an issue.
- Mrs Thatcher
- As prime minister Margaret Thatcher encouraged the sale of council houses to their tenants. While giving financial stability to families who benefited from this policy, it has reduced the stock of social housing available for rent.
- Home-owning democracy
- The intention was that increased home-ownership would enhance people’s stake in political stability. The value of houses has continued to increase on average, while the supply of new houses has not been adequate to meet demand. Statistics from the Office for National Statistics show that since 1981 the proportion of home owners in older age groups has continued to grow, whereas in the younger groups it has fallen, especially since 2001 among those aged under 34 and 24.