A nation of renters

Only at the top end, with the cash-rich oligarchs, the big bonus beneficiaries, the trustafarians and those who inherit homes that have been in families for generations should become the proud owners of some place to call their own.

The reality is that £43trn of Britain’s post-war wealth is tied up in residential property and, according to experts, that is by far the most money tied up in any single asset.

The debate over whether a house is a home or an investment is tired and exhausted and not worthy of serious debate.

It is the accumulated wealth in bricks and mortar that now drives the equity release sector and provides social care funding for some home owners in their old age.

This is a social purpose that those who oppose the expansion of home ownership tend to ignore.

Post-war housing has delivered to the ordinary working man and woman a lifestyle that even young people of today cannot imagine.

If the problem in the 1950s and 60s was affordability, the current crisis is one of supply, both in terms of social housing and of entry-level homes, since the demand is obvious.

Throughout most urban areas there is an acute shortage of homes to rent and an oversupply of people looking for homes

Throughout most urban areas, but particularly so in London, there is an acute shortage of homes to rent and an oversupply of people looking for homes.

It is in part to satisfy this need, along with the problems in the pensions sector, that the buy-to-let sector has been one of the fastest growing in housing. With the government spending £20bn a year on housing benefits and a growing list of people waiting for local authority and housing association homes, this figure does not look like reducing in the near future.

Further, the 1960s belief that people should not spend more than 10 per cent of their disposable pay in rent or mortgage, has been exposed for the myth it has always been.

What families decide to spend on providing a shelter for themselves and their dependants is one for that family and not the nanny state or its agents.

Having said this, I believe baby boomers have had it relatively good and must come to a settlement with the current generation of young men and women on a number of issues, including housing.

But this is far from kicking down the ladder as we climb on the roof of our own terrace homes.

Baby boomers have had the advantage of statutory local authority funded university grants and the best years of the defined benefits pensions.

Now we have seen the development of a gradual, but atavistic social policy regime in which young people are burdened with huge post-university debt, a struggle to get on the housing ladder and an even bigger one to get and hold down a decent job.

Compare the housing situation in the UK with Singapore, for example, where 90 per cent of people own their own homes, unlike in the UK when at the height of the housing boom 70 per cent did, a number that has now dropped to about 65 per cent.

We are no way near that level, even though we are a highly sophisticated society, seventh wealthiest in the world.

If there are about 150,000 new homes being built every year, and 250,000 people in need of homes, then it is simple arithmetic: build more homes.

If there are about 150,000 new homes being built every year, and 250,000 people in need of homes, then it is simple arithmetic: build more homes.

Of course, there are a number of reasons given for the shortage and how to resolve it, apart from the obvious need to build, including forcing us in to becoming a nation of renters.

But even if we were to rent, oppressive policies such as over intrusive rent control, multi-occupancy restrictions or extended tenants’ rights, all these will simply remove some of the rooms and flats presently available from the market.

Despite the background noise about high rents and shortage of social housing, the authoritarian personalities who drift into local and national politics still want to control the relationship between landlord and tenant.

They have introduced health and safety to an extent that goes far beyond the protection of tenants from faulty gas and electricity installations and the removal of slum conditions, to one in which even a creak on the stairs can now be a criminal nuisance.

More state oppression will simply bar the amateur landlord from the market, leaving it to the professionals and the Peter Rachmans of this world – one set with a battery of lawyers to protect their interests and the others who could not care less about the law.

Instead of encouraging the private home owners whose children have flown the nest to let their spare rooms, the health and safety monitors and a number of other busy bodies are interfering in the relationship between landlord and tenant.

Recently, Professor Danny Dorling, of Oxford University, in his book All That Is Solid, re-opened old wounds with a savage polemic on the housing market. Apart from more new-builds, how about the re-introduction of Miras, which was abolished in 2000?

Of course, all homeless people cannot be helped onto the ownership ladder for all kinds of reasons including mental health, family breakdown, public health and other social handicaps, but that is what the social safety net is there for.

In truth, there is also a political aspect to housing in that more than any other social policy initiative it has the power to give people a leg up the social ladder.

Housing should not be a lottery, but one of the many democratised opportunities available to young people, married or single and it is not beyond the imagination of human kind to come up with positive answers to the problem.

Hal Austin is editor of Financial Adviser