Thatcher's dream becomes a nightmare for a jilted generation

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Thatcher's dream becomes a nightmare for a jilted generation
The goal of a property-owning democracy will wither and die if Britain doesn't start building many more homes

Andrew Rawnsley
The Observer, Sunday 5 June 2011


Contrary to popular myth, it was not Margaret Thatcher who coined the phrase "property-owning democracy". She made it central to her creed, she sold more than a million council houses to their tenants, and since then politicians of many stripes have agreed that owning your home is a good thing. But the copyright on the concept belongs to a much less famous Tory called Noel Skelton, an MP in the 1920s and 1930s. It was his idea – novel for the time – that extending property ownership beyond the rich would encourage a sense of independence, pride and responsibility among the masses. An implication, which influenced Harold Macmillan's house-building programme in the 1950s as well as Mrs Thatcher in the 1980s, was that the working classes would turn away from socialism as property ownership infused them with conservative values.

The British left was highly hostile, then regretful that it had made a strategic political mistake by opposing council house sales, and finally became an enthusiast for property ownership in the 1990s. Thoughtful progressives located an egalitarian case for doing so. They noted that the starkest dividing line through British society is whether or not you possess capital assets. For most people, that comes down to whether or not you own your home. The haves do; the have-nots don't. Once the mortgage is paid off, the haves possess a store of wealth and an inheritance for their offspring. The have-nots have nothing to show for a lifetime of paying rent and zip to leave to their children. By the end of New Labour's time in office, it had not only embraced the property-owning democracy, it had even set a target for it. Property was not theft – it was aspiration.

The moment when an idea achieves universal consensus is often precisely when the concept starts to eat itself. The steep rise in values made British homes very pricey relative to income. Then came the financial bust and much tighter rationing of mortgages. A slew of surveys and reports has recently confirmed just how tough it has become to get a foot through the door. The average age of a first-time buyer fell to around 25 when Mrs T was in her pomp; it has now climbed to 37; the National Housing Federation forecasts that it could soon rise to 43. The postwar trend of more owning and less renting is sharply reversing. It may be a little premature to pronounce the death of the property-owning democracy. It is fair to say that it is having extreme difficulties with breathing.

What is to be done? The cool response is to say that there is nothing to panic about and something to celebrate because property ownership is a stupid obsession, a weird British fetish which we would be well rid of. There is a side of me that hears this argument and finds within it some seductive strains. We do, as a nation, tie up too much cash and emotion in unproductive bricks and mortar. There's too much mistaking house price inflation for economic wellbeing. There have been four price spikes in the last 40 years. A ghastly feature of each boom was the sound of middle-class home-owners smugly congratulating themselves on how much their houses were soaring in value as if this was testimony to their brilliant judgment rather than the simple good luck of surfing an asset bubble. It sounds sort of attractive when people say: "We should be more like the continentals." For good effect, that statement should be accompanied by a shrug; for best effect, the shrug should be Gallic. .............(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2011/jun/05/andrew-rawnsley-house-prices-construction

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