In 1981 Margaret Thatcher told the Tory party conference “The family is the basic unit of our society and it is in the family that the next generation is nurtured”.
The then prime minister added: “Our concern is to create a property-owning democracy and it is therefore a very human concern. It is a natural desire of Conservatives that every family should have a stake in society and that the privilege of a family home should not be restricted to the few.” Owning, in other words, was better than renting, morally as well as financially.
The dream promised by Thatcher, of easily accessible home ownership, such that hard-working people might build a future for themselves and their families based on a secure home, is for swathes of the population well and truly over. As Toby Helm reports from the Yorkshire constituency of Selby and Ainsty, many voters in the forthcoming byelection see home ownership not only as a remote prospect, due to its cost, but also as an unattractive one. There’s too much risk and stress, they think, when rising interest rates can lead to mortgage repayments that blow family finances apart.
These are workers, not shirkers, as Thatcher would have put it, people with responsible, skilled and demanding jobs. They are young and not-so-young, as it is now possible to grow well into middle age and have little prospect of getting a foot on the housing ladder. Renting, meanwhile, is also unappealing and may become more so, as landlords seek to recoup their rising borrowing costs by putting up rents.
Only older owner-occupiers, sitting pretty with paid-off mortgages on homes they bought long ago, are relatively unscathed, although even they are likely to see the values of their property drop, and might be affected by the troubles of their children in getting homes. And if a cooling of the overheated property market might seem like a good thing for accessibility to housing, its benefits would be nullified by high interest rates.
It’s a special kind of crisis that makes life worse for almost everyone, still more for a governing party for whom the idea of a “property owning democracy” was politically triumphant. Through the sale of council homes, through the deregulation and liberalisation of mortgage markets and through her persuasive speeches, Thatcher’s administration helped home ownership in Britain to increase from 55% of households in 1980 to 67% in 1990. Subsequent governments, pursuing similar pro-ownership policies, saw the figure reach a peak of 73% in the mid-noughties. The rate has been in decline since then.
The roots of the current crisis lie in a contradiction inherent in Thatcher’s policies, for she combined her wholesome vision of a stable family dwelling with a love of speculative markets. Citizens were invited not only to buy property, but treat their home as an investment, to stretch their buying capacity to the limit, to maximise their leverage and their debt ratios like amateur speculators. The Englishman’s proverbial castle was also his casino. Inflation, which Thatcher was proud to reduce in every other part of the economy, was celebrated when it came to homes – prices trebled during her 11-year rule.
Again, subsequent governments followed her, encouraging price increases and introducing initiatives such as Help to Buy to prop them up when they threatened to fall. As recently as the pandemic, one of the principal government responses was to encourage home-buying by relaxing stamp duty. But such actions, by raising the value of property, benefited existing owners more than prospective new ones.
Some reckoning was always due, which is what, most probably, is happening now. And the failures of the property markets also threaten the Thatcherite belief in the moral benefits of ownership. According to one of her ministers, Michael Heseltine, it “stimulates the attitudes of independence and self-reliance that are the bedrock of a free society”, but if that rock turns to quicksand, so do the security and incentives to be a responsible citizen that supposedly went with owning.
These pronouncements came with the obnoxious implication that people who did not own were lesser members of society, incompletely enfranchised. There was an assumption that renting will always be a less desirable option – one that was both self-fulfilling and assisted by, for example, the hollowing out of social housing. The resulting perception and reality are, indeed, that renting is a less desirable option.
But the current crisis should see an end to the idea that one sort of tenure is more virtuous than another. Ownership will always be a good option desired by many, but so should renting. What matters about housing is that it should be accessible, secure and supportive of the lives people want to lead. There is more than one means of attaining these ends.
