Here's the chart showing the percentage of English households who were owner-occupiers since 1953 (from DCLG). Clearly, in the 1950s, a majority of voters were tenants, most of whom were keen to own their own home and with the money to pay for it, so it was politically expedient to allow a lot of new houses to be built. And the private tenants who didn't like renting privately but couldn't quite afford to buy were keen for more council housing to be built. So both Labour and Tory governments allowed a lot of new houses to be built (for owner-occupation or council housing). Housing standards improved markedly.
The same applied in the 1960s. In the 1970s, we passed the 50% owner-occupiers mark and hit 60% by 1980, which is clearly enough to give owner-occupiers an electoral majority, and the whole political equation flipped over. Once a solid majority were home-owners, people noticed that increasing supply tended to dampen price increases and so there were votes to be won by restricting the supply of new housing, thus giving the majority - owner-occupiers - the illusion of wealth.
For a pithy definition of the Cult of Home-Owner-Ism, I refer you to this exchange over at Obo's.
Which is why new construction plummeted in about 1980 and has stayed low ever since. And don't get me started on giving away taxpayer-owned council housing for political gain, which was a cunning way of creating the illusion of an increase in wealth without a single brick being laid on another (ultimately it was just an increase in private sector debt and an increased burden on the taxpayer renting it all back again from 'private' landlords):Home-owners lapped this up of course, swallowed the BS about 'protecting the countryside from the blight of urban sprawl' and 'giving people a stake in society' have spent the last thirty years spouting it back.
I suspect that there is a natural upper limit to the number of owner-occupiers at around two-thirds, so those two-thirds can exploit the one-third beneath them who want to 'get on the housing ladder'. If they gave away all council housing to its current occupants for free, that would temporarily boost the number to nearly ninety per cent, so new construction would grind to a halt, prices and rents will rise even higher, so no young people will be able to buy, and the number will drift down again.
We also know in practice that half of the council housing they give away will end up back in the hands of landlords, or that the owners will move elsewhere and rent out the home rather than selling it - there'll always be people who don't earn enough to be able to scrape a deposit together and have stable enough earnings to be able to get a mortgage.
Friday 9 September 2011
Tyranny Of The Majority
My latest blogpost: Tyranny Of The MajorityTweet this! Posted by Mark Wadsworth at 11:06
Labels: Blogging, Home-Owner-Ism
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29 comments:
the West end of st Ives (Cambs) has just been utterly ruined by developers producing a load of new homes. All of which are far too close together (natch) and the bastards also cut down 95% of the mature trees before the council could stop them so these wretched dwellinmgs are all very visible from the road. How on Earth are the developers going to sell them all in a dpressed market where banks et al are disinclined to lend? Madness and vandalism.
"For a pithy definition of the Cult of Home-Owner-Ism, I refer you to this exchange over at Obo's."
That puts Home-Ownerists into a very tiny majority. Mark, it's your expression and you can define it how you like, but from my experience being on a local council outside the Home Counties, the vast majority of NIMBYs are simply not that politically or economically aware to even think that restricting the supply of new houses is going to affect the value of their own. A NIMBY thinks precisely that - Not In My Back Yard. They are generally not against housebuilding in general (as they would be if they were home-ownerists by your definition), they just don't want new construction spoiling their view, increasing the traffic past their house, or spoiling their Rural Idyll. A NIMBY in Christchurch couldn't give a stuff about new houses in Ringwood and vice versa, in fact the former would probably think it was a good idea to build lots of new houses in Ringwood, it might stop developers wanting to build in Christchurch.
AFAICS, the HOist conspiracy is much more a political thing of promoting myths like the Rural Idyll, the House as Investment, the Housing Ladder etc. The NIMBYs are the brainwashed recipients of this bullshit, not the originators.
"Once a solid majority were home-owners, people noticed that increasing supply tended to dampen price increases and so there were votes to be won by restricting the supply of new housing, thus giving the majority - owner-occupiers - the illusion of wealth"
I would disagree. I would say that once a solid majority were home-owners, politicians noticed that NIMBYs were now a majority and so there were votes to be won by restricting the supply of new housing, with the added political bonus of rising house prices giving the majority - owner-occupiers - the illusion of wealth
Partly the fault of inflation. If people can't invest money with a real positive rate of return bricks an mortar looks safe. If we got to the stage that housebuilding was not primarily a political monopoly house prices would first fall substantially & then rise with inflation, not even with inflation plus growth and nobody would consider they were "investing" and would stop trying to maintain the monopoly.
I think Bayard is wrong about owners not being sophisticated enough to realise the advantage of beilng in an entrenched monopoly, however if he is right, or even partly so, the answer would be entire new towns in brown/greenfield sites where the developer is allowed to build absolutely anything.
Well I’m convinced. A social and economic trend where people pursued their own interests and banks and policy-makers took covert advantage.
We can talk about it, but I don’t see it being put right now it’s happened. People respond poorly to ideas and arguments, particularly where there is a consensus to feed on.
The graph and therefor your post is totally irrelevant, Some people got up off their arses and bought their home, some people were happy to pay rent to the state or other landlords, It's called choice - something you commies have a problem in understanding.
Gang of thieves.
I agree with Bayard, I think you are looking at correlation and seeing causation. In the post-war period there was very much a "dash for housing", culminating in the massive surge in the building of extremely poor-quality council housing in our cities.
I don't think there is a conscious political movement amongst voters to restrict the supply of homes. There is a conscious attitude of people to "protect greenery" which has sprung up at about the same time as the increase in home-ownership. But I don't think that people on the edge of towns think to themselves "let's keep house prices high by not allowing any new building" they think "my town is quite lovely as it is and new homes are invariably ugly and poorly-designed" which isn't quite the same thing.
I think if you want to change anything you have to start with the right premise.
You also ignore other factors such as the abolition of rent control, the introduction of the Shorthold, the Leasehold Reform Act, and other things.
I suspect that there is a natural upper limit to the number of owner-occupiers at around two-thirds
In the UK perhaps. In the U.S. and Australia, it was always higher than that, without deleterious effect.
I remember years ago an older family member telling who to the hooror of some relatives had married a guy from a council estate, "It is not a question of whether you own or rent but what values you have that make you who you are."
Very true. I wish we could get over the rent stigma. People are different and we weren't all born to spend our lives paying a mortgage.
Although it may well be the case that most NIMBYs are not consciously acting to protect the scarcity value in their home, a NIMBY will nearly always be an owner-occupier. Owner-occupiers typically invest money and then time in their property in it's particular environment. A change to this environment is then seen as an assault on the owner-occupiers stake in it. I guess the positive spin is that owner-occupiers tend to care more about the local environment. It is clear that NIMBYism has risen concurrently with the increase in owner-occupiership.
Arguing with my ardent NIMBY father about new house building, his main case (fall-back position) appears to be that what he really wants is jobs moved away from the south east (he's retired) so that the distribution of new development is spread more evenly across the country.
I don't know if you saw this recent graph on the BBC that shows that between 1997 and 2010, the % of under 30s that rented privately has risen from 30% to 50%, with a similar drop off in home ownership levels. It probably helps to explain the drop off in your first graph. It's hard to imagine how such a rapid change in housing tenure for this age group can be sustained. The last labour government has a lot of explaining to do.
Anon,
The 50% of renters are actually the lucky ones, who haven't mortgaged themselves to the hilt to buy a (now) depreciating asset. With luck, in a few years time they will be able to afford to buy as prices will have fallen. However, I don't suppose they look at it like that.
Usually a mortgage will run for 25 years, rent runs until the day you die or decide to give up working, join the communist party and get some other bastard to pay your rent for you.
It's a choice.
Usually a mortgage will run for 25 years but the maintenance and taxes will run until the day you die -- or wise up, sell the house and invest the proceeds to pay the rent for you. Let some other mug pay the M+T. Ah, capitalism in action! Love it, love it, love it!
"Usually a mortgage will run for 25 years,"
Not if it's an interest-only mortgage, it doesn't. Rent on money, rent on property, it's all money out of your pocket and into someone else's.
Hope the show goes well.
Yesterday Michael Hudson confirmed what I've been trying to make clear for years.
What I say is that mortgage interest is paid OUT of land rent. From where ELSE would it be paid? (1)
If a landlord owned the land free and clear, there would be no interest; the landlord would get all. (2)
Today, the bankers get about 2/3 of the rent. My statistics show this. (3)MH
1) Mortgage interest = economic rent, the return to the landowner, not the return to capital
2) Homeownerists in other words
3) Banks are the worlds biggest landlords, parasites, looters, benefit scroungers
The first graph seems at odds with this. The term owner-occupier needs clearer definition. In fact it is an oxymoron. Mortgagees may occupy but they certainly do not own anything until mortgage redemption.
Thoughts?
@Robin,
Good for Michael Hudson. There's nothing really surprising in what he says. But it's good to know that he's taking a stab at quantifying it. Do you have a link to the article you took the quote from?
My thoughts are that the LVT burden on a property should be shared between the mortgagor and the mortgagee, split in proportion to the amount of equity that the mortgagee actually has in the property, against the size of the outstanding mortgage debt. Of course some adjustment would also have to be made to account for the fact that part of the mortgage is to pay for the building rather than the land.
That way when a property falls into negative equity the burden of LVT payment would fall on the mortgagor.
Derek
Yes they always say its obvious after someone has said it. Too late I'm afraid. (:
The quote was an email directed to me in response to asking for clarification.
The original article was on Spotlight on RT.com
And here on the web:
http://r20.rs6.net/tn.jsp?llr=o8b4necab&et=1107499822862&s=28688&e=001US5YxsLxx6Bw0_-EOUlnnNbrqIf5Lx2JhqdF80x3W_0dLOILY2US97VKqUKfbnrmjwdTnDVDptALY6P6gi1_Y0t_XlfitRoXKr00hg4Zm-KDn6D1kaRIuex6cSxX08a3_uBDIXfT8nj6Rx1VB9_N9vXo177yORl7jwZmEr5JUik=
Thanks for your input everybody, I can't respond to every comment, but that Anon who keeps popping up to call me a Commie puzzles me greatly.
AFAICR, it was the Commies in Russia who had central targets and rationing of everything and who deliberately prevented the markets from producing what people wanted to buy (or produce, for that matter), while they all had their state-subsidised apartments and dachas on the Black Sea.
From where I'm sitting, it's the Home-Owner-Ists who very much resemble the Commies in Russia. The young people (anybody under 40 or so) would love to buy their own home but are being forced to pay double what it's worth (analogous to non-Party Russians buying smuggled goods at outrageous prices on the black market).
Mark, I don't understand what you're driving at. I wanted somewhere to live, so I bought a plot of land and had a house built upon it. Land-owner was happy, builders were happy, bank was happy, missis is happy. I would have been equally happy in a different way if I was still in my bedsit in Belfast swilling beer and claiming benefits but what the hell. All transactions were voluntary (apart from the various taxes) and everyone got what they wanted. I don't see what's cult-like about buying stuff. You give someone some money and then you get something. Houses are a manifestation of workmanship and therefore little different from pocket-knives, brake pads, or whatever. Just more expensive, because they're big enough to climb into.
You are called a commie because they are looking for the most damning label to have you crucified with.
I'm surprised you have not been called a paedophile yet.
"Private property in land is a bold, bare, enormous wrong -- like chattel slavery. The majority of people do not recognize this, simply because the majority of people do not think. To them, whatever is, is right. It continues to appear so until its injustice has been pointed out repeatedly. In general, they are ready to crucify whoever first attempts this."
That's you that is.
Please can you ask Mr Farage:
What would be the effect on land values of making banking and the EU a model of purity and thrift?
Rick, there's nothing cult-like about wanting to live in a nice house. I'm completely 100% in favour of everybody owning their own nice house, which necessitates bringing prices down.
The cult of Home-Owner-Ism is about preventing other people from living in (and certainly not owning) nice houses, by restricting new builds and pushing up house prices to unaffordable levels. And then giving yourself a pat on the back for your 'sensible investment' and muttering about urban sprawl and the hallowed green belt.
I'm completely 100% in favour of everybody owning their own nice house
Commie!
I see your point now, the desire to own a house is the valuable commodity upon which people speculate, rather than the actual worth of materials and man-hours. Yes, you do have a point. Plus I heard on the radio that England has a mere 4% of land built upon or actually covered by buildings, so the overcrowding myth is just that. To my mind there should be no restrictions on the type of building or where it's built - once you've bought the land, of course - although for insurance purposes a certificate of inspection for safety might be worth having. There is no need for Government interference in this matter (or anything else IMO). NIMBYs, if they want to preserve a nice view etc, could form a co-operative and buy land surrounding their houses and then keep it pristine.
Rick, excellent summary, completely agreed.
PS the 4% figure relates to just homes and gardens and residential roads. There's as much again in trunk roads, railways, commercial buildings, public buildings, car parks etc.
Rick
Glad you see that too.
Er but on restrictions. How would you feel if gypsies bought the land next door and built their own stuff on it? I ask because I see this come up all the time in planning ctte's and you'd be amazed at the blatant racism that turns normally fair people with your view here, into outright nimby's, just like that. And then they deny their own words.
My view is that the community decides, not a protectionist co-op which would only help itself at the cost of all others.
Robin Smith,
I ask because I see this come up all the time in planning ctte's and you'd be amazed at the blatant racism that turns normally fair people with your view here, into outright nimby's, just like that. And then they deny their own words.
Let's be clear: just about no-one has a problem with gypsies because of their ethnic origin. According to Wikipedia, the Romani are originally from India (people who we're quite happy to hire as accountants, dentists, computer programmers, shop owners and dozens of other jobs) and then went to central Europe (where our plumbers and taxi drivers now come from).
I've had 2 incidents... one where they took on a bit of open ground, the council got them to leave and they did. And a load of new trees near the park happened to disappear the same night. The other, they parked on a hill, with a footpath running over it, blocking the footpath, leaving huge ruts in the grass and all their rubbish.
Find me a single experience of a good experience of gypsies arriving in a field.
RS, your reply to Rick was a bit below the belt. I have never ever objected to any new development anywhere, however near, but I have had neighbours who made life Hell.
And lots of people have had unfortunate experiences with 'travellers', as JT - no NIMBY he - points out.
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