Home truths?

You take my house when you do take the prop
That doth sustain my house; you take my life
When you do take the means whereby I live.

Is our housing sector broken? I don’t just mean in terms of its output, which the last few CPA and PMI surveys and forecasts have confirmed is way over-due an uptick. I mean the whole structure, the way it operates, the way we view housing in this country.

The phrase ‘property-owning democracy’ was coined in the 1920 by a Tory MP, Noel Skelton, who argued that argued that democratic societies in particular require a broad base of property owners to endure and prosper. He did so in order to try and head off feelings of economic disenfranchisement amongst a growing number of workers post-World War One. The idea was revived post Word War Two by Anthony Eden MP, before he was Prime Minister, wanting to highlight an alternative to the nationalisation that the Labour Government, under Clement Atlee, was pursuing.

No apologies for the detour into UK political history – I’m a politics geek. This property-owning democracy idea has persisted, pretty successfully, ever since, exploding in the 1980s under the Thatcher government and the wholesale sell-off of council housing to tenants.

However, when a society puts property ownership above all else, when it idolises possession, it puts those who don’t possess, those who rent at a disadvantage, socially and culturally.

How many of today’s youngsters, those coming out of colleges and universities with huge debts will be able to join the property-owning democracy?

I know I live in a particularly wealthy bubble in the south east, but I think this scenario is probably replicated elsewhere. 30 years ago, someone in their second job out of university was able to buy, at 3 times their annual salary, and a £10k inheritance, a three-bedroomed semi-detached, and sell it, 17 years later at 10 times what they bought it for. That same property, admittedly having undergone a considerable renovation, – but still on the same road, still with no parking, still semi-detached – went on the market recently for 14 times its 1993 price. If salaries had kept pace with that, then it wouldn’t be a problem. Mine certainly hasn’t. If yours did, then can have a tenner?

It’s madness, but so much of our nation’s economic confidence, our ability and willingness to spend money is tied up with how rich we feel, which is directly related to how much we see the value of our owned properties rise.

The Labour government has promised – as did the administrations which came before it – to get the country housed, to ‘build, baby build’, to ‘Get Britain Building’. So many promises, so many initiatives, most of which have only served to make it easier to buy properties: Help To Buy being a case in point. Yes, it got the housebuilding sector moving at a time when the building materials manufacturers supplying tat sector desperately needed it to. It also helped to fuel a rise in property prices because it still didn’t address the fundamental supply/demand issue. I don’t think this lot have got it right yet either.

Large housebuilding conglomerates have duty of care to their shareholders to make money. They do that by selling the fruits of their labour for the highest prices the market will accept. One of the ways they do that is by carefully balancing out that supply/demand ratio in their favour. Is the ROI on a cluster of four-bedroomed, double garaged executive homes, greater than that on an estate of ‘affordable homes’, or social housing? I’m guessing it must be, because otherwise we would see every building ploy filled with affordable housing instead.

I could go on, but we’d be here all day. There was a great article in The Guardian a few days ago by George Monbiot which kick-started this thought process in my brain. He puts it all far better than I can. Well worth a read