No place like an afforable home

by John Darvall

Today the average house price in the UK is over £190,000. That’s the average, the mean and for many this mean means they will never be able to afford to buy and own their own home. Almost a third of adults in the UK now do not own their own home and they will never be able to afford this dream, even with a 20% discount. The great British aspiration of home ownership, which we all long for, has been central to government policy since the 1960’s. With home ownership comes your stake in society and its forward march to a better tomorrow. You will have something to leave to the next generation. You will be safe and you will be part of the great and the good. The trouble is that this is nonsense and part of one of a number of very controlled and calculated cons.

The first con is that you buy your own home. The reality is that unless you have the cash to do this you don’t buy it. You borrow to buy it. You take out a huge debt to ‘buy’ your own home and, if you are very lucky, you will pay it all off in 25 years. The bank owns your home and, until you pay them back, they own you too. The debt you have will get smaller over time if you choose repayment over interest only, but this is assuming you don’t move, you don’t borrow any more against the property as its value goes up and you keep up the repayments. The average age of the first time buyer is now in the mid thirties and this means if you don’t move, win the lottery or have an inheritance you will pay off the mortgage when you are 60. That is just 7 years of paying nothing before you retire. The average age that mortgages are paid off has increased by a decade in a decade.

The second con is that your home is an asset, an investment and your financial security. None of this is real. The reality is that successive governments have controlled the building of new homes and applied the basic economic principle of supply and demand to control property prices. By controlling the number of homes built and keeping this significantly smaller than the demand the prices rise. An increase in property prices is good for business, whatever your business is, including power.

The third con is that rising property prices makes those who ‘own’ their own homes feel better. The rise in property values is not real. The money is not real. You can’t hack out a brick from the back wall of your home and take it to Tesco to buy your shopping with it. The only way the rise in property prices works for you is when you sell your property and buy something smaller. Successive governments have manipulated the building of homes to make the middle classes feel better with rising property prices. Pick up any black top tabloid newspaper and you will see the obsession with property prices, freak weather, wonder pills and Princess Diana. Tabloids and TV are constantly feeding the beast that is the property market.

The truth is that successive governments since the 1970’s have failed to build enough homes and, most importantly, the right sort of homes for people to live in. Council houses, social housing, starter homes (that you will have to move from if you start a family thus increasing your mortgage debt and its duration) family homes and, most importantly, homes where they are actually needed have all been lacking for a generation in any significant number.

The truth is that the Green Belt that everyone gets so precious about is little more than a foolish aspiration born in the 1950’s. The Green Belt is steeped in a myth of rolling fields and gambling lambs. In reality the Green Belt is strangling families, towns and cities from building the homes needed.

The truth is that we all need to accept that building homes is not only needed but essential for everyone and stop being ‘not in my back yard’ about it. Yes there are brown field sites, old shops and commercial buildings that can be converted into homes but our friends, family, loved ones and you deserve a home that you can afford, where you want to be and that you can afford.

The politics of greed and aspiration with home ownership has caused a very real housing crisis. It has hurt those suffering under welfare reforms who don’t have a smaller home to move to through to those who can’t have the home they need because they simply can’t afford it. Not building homes is bad politics, it’s bad planning, it’s bad socially and, most of all, it’s nonsense.