In 2013, 1,117,000 households had mortgage debts amounting to more than 4.5 times their disposable income. Flickr/Nico Hogg. Some rights reserved.
In a piece on September 25, nearly two weeks after Jeremy Corbyn’s ascent to the leadership of the Labour Party, Owen Jones argued: “Labour should say it loud: under the Tories, homeownership is becoming an impossible dream – and it is only Labour that can realise the hopes and aspirations of the majority.” During his (failed) leadership campaign, Andy Burnham also pledged to make Labour the “party of home ownership”, whilst Ed Miliband attempted to go head-to-head with the Conservatives on the housing question, castigating David Cameron for falling levels of ownership, and proposing that stamp duty be scrapped for first-time buyers on houses worth less than £300,000.
This emphasis on the “dream” of owning a home has also been taken up by Jeremy Corbyn’s Shadow Housing Minister, John Healey:
“My great ambition is to get to the point where people believe the housing crisis and the housing costs crisis can be tackled. At the heart of that must be the dream that most people can afford their own home at some point in their lives.”
In 1979, when nearly half of the British population lived in council housing, the obsession with ownership had not fully taken hold of even the Tories. This of course changed – radically – with Margaret Thatcher’s “Right to Buy” revolution, when “local authorities were forced to sell council houses to any sitting tenant able and eager to buy, at discounts of up to 50 per cent.” The (often very destructive) consequences of Right to Buy are explored at length in James Meek’s excellent essay “Where Will We Live?”, in which he describes it as “an electoral masterstroke” “cherished by Tories and New Labour alike”, offering “a life-changing fortune to a relatively small group of people, a group that, not by coincidence, contained a large number of swing voters.”
Thatcher’s vision of a “property-owning democracy” stems directly from Right to Buy. It is also a vision – at least in its most fundamental conviction that we all aspire to home ownership – that has inspired the electorate, the Labour Party and its “professional advice-givers” in the liberal media. Why?
“What people want are homes they can actually own”
In Jones’ piece mentioned above, he points out that “nearly eight out of 10 Britons aspire to homeownership.” This number, coming from a Yougov survey and (perhaps revealingly) re-published on the websites of estate agents, is probably broadly accurate.
The first argument stemming from this is straightforward: if Labour starts telling people that home ownership is not all it’s cracked up to be, it risks isolating itself, immediately, from the overwhelming force of public opinion. Many of Jeremy Corbyn’s supposedly “radical” positions are, when compared with a wealth of evidence from polling, fairly mainstream. But if he stood up and said “our obsession with home ownership is unrealistic and may be a big part of the housing crisis”, maybe he would be turning the party into a self-indulgent “laughing stock,” to borrow Dan Hodges’ term.
Of course, while progressives have often accepted the general premise that Labour should promote home ownership, they have undoubtedly deviated from the Conservatives’ approach. Miliband’s stamp duty proposals were fairly bold and accompanied by the suggestion of some degree of regulation over the private rented sector. Owen Jones’ suggestions include “an ambitious programme” of building high-quality council housing, the replacement of stamp duty and council tax with a land value tax, and the promotion of “local authority mortgages for those who cannot currently get on the housing ladder.”
Such ideas are clearly quite different from what is currently on offer – namely David Cameron’s recent announcement of a “starter homes proposal” designed to “unblock housebuilding in the UK by abolishing demands that developers provide a certain amount of affordable housing to rent in new developments.”
Yet when Cameron says “what people want are homes they can actually own”, not simply rent, he is unlikely to be met with any serious opposition.
A nation of debt
This all begs an obvious question: what’s wrong with a cross-party consensus on the importance of home ownership?
One problem is the fact that “home ownership”, particularly with the current euphoric state of the property market, really means debt, and lots of it. Recently released figures from the Office of National Statistics revealed that “in 2013, 1,117,000 households had mortgage debts amounting to more than 4.5 times their disposable income”, which, unbelievably, actually represented a “fall compared with 2011, when 1.3m households had mortgage debts at this level.”
No wonder Bank of England governor Mark Carney has expressed concern that “there are a large number of people who are carrying a lot of debt”, and the deputy governor for Financial Stability has warned that household debt – most of it from mortgages – still represents the biggest threat to the nation’s economic stability.
On the one hand, this is arguably the result of successive governments encouraging us – either directly through policies like “Help to Buy” or indirectly through the narrative of the home-owning “dream” – to live beyond our means.
On the other, it is, as Rowan Moore has suggested, an inevitable consequence of “the obsession with owner-occupation”, which “encourages an approach to development that relies on continuing increases in value.” Take out a big mortgage, hope prices keep going up and interest rates remain low, and good luck to those who aren’t yet on the “ladder.”
What we may soon see (again) is the bursting of this bubble; what we are seeing already is our transformation into a nation of renting and, of course, a nation of debt.
“Don’t they realise other people want what they’ve got?”
Part of David Cameron’s announcement of his move to create “Generation Buy” said a lot about his attitude towards renting:
“The officials who prepare plans for new homes, the developers who build them and the politicians who talk about them – most of these people own the homes they live in. Don’t they realise other people want what they’ve got – a home of their own?”
The implication is that renting is either a sign of failure or a stop-gap on the road to our full stake in citizenship. As many of us know, this sounds odd to people living in other European cities, like Berlin, where a majority of people, including families, are happy to rent and have lower levels of debt and higher levels of disposable income, compared to the real estate jungle that is London.
There are, of course, nearly three times as many people living in London, which makes regulation of the private rented sector much more difficult, while the British left’s comparisons with Berlin also tend to caricature the city as some sort of socialist paradise (it’s not). But the basic point is that home ownership is not, by any stretch of the imagination, a prerequisite for a good standard of living.
To get a grip on what Danny Dorling has called the “Great Housing Disaster” we have to be prepared to confront the home ownership question. If we look at the demands of the impressive range of groups fighting for decent housing in Britain – Architects for Social Housing, Generation Rent, Focus E15, Sweets Way Resists to name a few – they are not, as Cameron suggests, envious of the “officials”, “developers” and “politicians” who “own the homes they live in.” They are basically just advocating a decent standard of housing for all, no matter who (even, gasp, the government) ultimately owns it.
Exactly how we reach this goal is a difficult question to answer. Corbyn has of course made some positive sounds, and has seen in his own constituency the ramifications of the country’s housing disaster. But he and his new-look party may, at some point, have to ask whether it’s such a good idea to position themselves as (another) “party of home ownership.”
Yes, 8 out of 10 Britons aspire to home ownership. In other words, this aspiration is within the “Overton Window” that Owen Jones regularly refers to: “the political ideas that are seen as politically acceptable, palatable, mainstream, centre-ground, and so on, at any given time.” Yet the Window, he reminds us, “is not static: it shifts.”
Could it “shift” on this big, deeply entrenched social attitude? Maybe, maybe not. But if it doesn’t soon, we may have to wait until the great euphoria of the British housing market once again disintegrates under the weight of the classic realisation – and panic – that an asset’s value has been inflated by rampant speculation.
As recent history tells us, this can happen very quickly, and it is those who have been convinced to pursue the great home-owning “dream” well beyond their means who will be the first to suffer.
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