Are We Seeing the Slow Death of the Home Owning Dream? SATURDAY ESSAY

Daily Mail (London), April 12, 2014 | Go to article overview

Are We Seeing the Slow Death of the Home Owning Dream? SATURDAY ESSAY


Byline: Harry Mount

NO COUNTRY on Earth is as obsessed with property ownership as Britain. And no other country has enjoyed the benefits of property ownership for so long.

Indeed, the phrase 'An Englishman's home is his castle' goes back to 1623, when the idea was first established in common law by the distinguished judge, Sir Edward Coke.

The last century was a particular triumph for British home-ownership. Throughout this period, the percentage of people owning their own home climbed -- with a huge boost given by Margaret Thatcher's government, which introduced the revolutionary policy that enabled people to buy their own council house.

This right-to-buy scheme proved tremendously successful, offering five million tenants the opportunity to own their own home. It created what was described as the 'age of the propertyowning democracy', with more than a million people taking up the offer in the decade that followed.

Moreover, home-ownership figures continued to soar over the next 30 years until they hit a peak in 2003, with 71 per cent of Britons living in homes they owned.

But over the past 11 years, homeownership -- something that has improved people's lives more than any other single social advance of the 20th century -- has gone into reverse.

Indeed, we are now witnessing what some have termed 'Generation Rent'.

Official figures show that the percentage of people who own the home they live in dropped last year to 65.2 per cent -- the lowest level since 1987. Conversely, the number of people renting homes nearly doubled, from 2.2 million in 2002/03, to 3.9 million last year.

The young are being hit particularly hard. Half of those renting privately are under 34. Statistics show that out of a total of 14.3 million home-owners in England, just 1.4 million are aged between 25 and 34 -- the time of life when young families traditionally make their first step onto the property ladder. In the 16-24 age group, there are just 96,000 home-owners.

Home-ownership is increasingly concentrated among older people, with more than one-third of England's owner-occupiers aged 65 or over.

AND, for the first time in living memory, the number of people renting from private landlords is greater than those living in housing association and council homes, as a desperate shortage of housing stock -- triggered by mass immigration and family breakdown -- has led to the rebirth of the so-called 'rentier' class.

These are landlords, named after the French word for rent ('rente'), whose property portfolios are rented at sometimes punishingly high rates to people who can't afford their own home. Indeed, the number of properties being rented out is likely to increase significantly as a result of the surprise pension reform announcement by Chancellor George Osborne in his Budget last month.

With the country's over-65s now allowed the freedom to invest their own pension pots, financial experts believe this will encourage thousands to use the money to buy a second property and rent it out.

Not only will the retired benefit from a good regular source of rental income, but, with property values soaring -- as proved by figures this week from the Royal Institution of Chartered Surveyors, predicting an average six per cent a year rise until 2020 -- the investment will be much more profitable than if they put their pensions in annuities or shares.

This will inevitably create a boom for a new generation of rentiers.

While we will obviously not see a return to the unspeakable conditions described by Charles Dickens in the mid-19th century, and the reign of terror inflicted by some brutal landlords in the 20th century, there is concern about the social effects of people being unable to afford their own homes.

Not only can they never feel the deep satisfaction that comes with owning your own property, but they are always at risk of being exploited by unscrupulous landlords. …

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