The ConservativeHome manifesto highlights the decline of homeownership as one of the greatest threats to the Conservative vision of a property owning democracy:
“When Margaret Thatcher came to power 55 per cent of households were owner occupied. By the time she left office, that figure had increased to 66 per cent – finally peaking at just under seventy per cent in 2001 and 2002…
“However, Thatcher’s legacy is being undone. The slide in home ownership began after 2002 – and has continued ever since. By 2011, the proportion of owner occupied homes was down to 64 per cent.”
This is a dramatic change for three reasons:
Firstly, it reverses a century-long trend of increasing homeownership; secondly, homeownership will, at this rate of decline, be back down to pre-Thatcher levels in the space of a single generation; and, thirdly, because it is concentrated among the young, it amounts to a radical disruption in the transmission of ownership between generations.
This third point is powerfully illustrated in a piece by Jason Karaian for Quartz. He cites a Joseph Rowntree Foundation report, showing the extent to which homeownership has collapsed among young people:
“Using panel survey data, the foundation takes twentysomethings in 1991 to 1995 as a baseline and computes the odds of home-ownership among a range of age groups during different periods relative to this group. The data show that twentysomethings in 2005 to 2008 were only around half as likely to have bought a home as the same age group in 1991 to 1995. And recently it’s taking even older Brits longer to buy their first home than it took much younger households in the past.”
There’s a lot more at stake here then simply having to wait longer:
“People who move from renting to home ownership are much less at risk of chronic poverty, the foundation says. It and most other organizations agree that the UK needs to loosen its planning restrictions and build more in order to boost the affordability of its housing stock for both buyers and renters.”
Of course, affordability isn’t just a matter of property prices. Young people also need to earn enough to pay the rent, save money for a deposit and then keep up with their mortgage payments.
In another article for Quartz, Jason Karaian has bad news on this front too:
“…new data on average wages in the UK paint a dreary picture for British workers. When adjusted for inflation, the typical worker’s weekly pay today is 5% less than it was 10 years ago. What’s even more striking over this period is how poorly young workers have fared in relation to older ones. In fact, over-60s are the only group to see their earnings rise faster than inflation over the past decade.”
On some measures, real earnings for the under 25s are lower today than they were in 1988:
“Put another way, young workers today earn less—after adjusting for inflation—than their parents did at the same age.”
These, remember, are the present and future taxpayers that our political and financial elites expect to pay their pensions, service the national debt and bail out the banks the next time they go bust.
Good luck with that.