For our foreign readers: nothing, and we mean nothing, obsesses the British so much as property; what the Americans call real estate. It’s true some dinner party conversations may touch upon sex (but usually everyone’s too tired), holidays (but: “been there, done that”) children (but who needs anxiety?) and even work (god, Chris is so boring!). No, it’ll be property that really gets their juices flowing-how much you’ve got, what you paid for it, what you’re doing to it and how much you could sell it for in order to buy the next ones. In this uber-financialised economy, its been the culture for generations.
It’s not hard to see why: it’s a status symbol; it may give you somewhere pleasant to live; it’s an investment. Above all, it was drummed into generations of poorer children that it was better to pay into a mortgage than to shell out the same money every month to a shark landlord, and have nothing in return. For the Ruling Class it was better still: people paying off twenty five year mortgages are unlikely to strike or join inconvenient political parties. They too have a stake in the system.
Except when they don’t. Here’s Larry Elliott of the Guardian
Levels of owner-occupation fell from a peak of 71% in the early years of this century to 64% less than a decade and a half later and have remained there ever since. One of the (many) reasons why the Conservative party polls poorly among young people is that its policies have been tailored to suit the interests of older voters
We confess that this worries us even more. History shows that an educated, propertyless precariat is a prime recruiting ground for revolutionaries of all sorts. To be fair Elliott sees hope where we didn’t think it would be: Gerard Lyons of the Policy Exchange Think Tank. Lyons sees the problem as more about deposits than paying mortgage instalments. His solution?
…… a form of blended mortgage product that would deliver 95% loan-to-value home loans but be provided by three different financial institutions. The riskiest part of the mortgage – the bit between 85% and 95% of the homes value – would be provided by investment banks; the middle chunk would be provided by retail banks and building societies, while the last part would be delivered by long-term investors such as pension funds.
The paper supports the idea of a land value tax, and says the stamp duty holiday should become permanent, with no levy on lower-priced homes.
We beg you to read the full article; no one does context and even-handed analysis better than Elliott. Lyons and Policy Exchange are a right-wing outfit, not left-wing. Societies fail not because they didn’t understand their problems, but because they rejected solutions until it was too late.
#property #mortgage #generationrent #owner-occupiers #socialmobility #policyexchange #deposit