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Why home ownership is becoming passé in Britain

High prices mean that many younger Brits will flat-share well into their adult lives


 
Three’s company

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After arriving in London in 1896, the German architect Hermann Muthesius observed in a letter home, “There is nothing as unique in English architecture as the development of the house. No nation is more committed to its development, because no nation has identified itself more with the house.”

Judging by the number of home improvement programs clogging the TV dial in contemporary Britain (picture an endless parade of middle-aged couples expending their savings and sanity renovating medieval thatched cottages in Wiltshire), his words hold true today. From the enclosure riots of the 16th century to Margaret Thatcher’s “right to buy” scheme, which in the 1980s and ’90s encouraged tenants of government-subsidized housing to buy their council homes at a discounted rate, the issue of property—who owns it, who doesn’t, and who gets to lord it over whom—has become a national obsession, and in times of economic uncertainty, a class-based sore point.

Today it’s both. As beleaguered Britain wrestles with a shortage of affordable housing (1.5 million are on social housing waiting lists in England), many young urbanites are losing hope they will ever achieve the middle-class dream of owning—in some cases even renting—their own private space. The rise of what the media here has now dubbed “Generation Rent” is highlighting a whole new class divide: the one that exists between the land-rich older generation and their priced-out offspring.

According to a new report released by the National Housing Federation, home ownership in England has been in a state of serious decline since 2001. In the next decade, the NHF predicts the proportion of people in owner-occupied homes will dip down to the levels of the Thatcher-era mid-’80s. By 2021, it’s predicted that home ownership will be down nearly 10 percentage points from its peak of 72.5 per cent two decades ago. In London, ownership is expected to drop to 44 per cent.

But for most Londoners of my generation—that is to say, those of us who find ourselves renting in our 20s and well into our 30s—home ownership isn’t even a dream worth fantasizing about. In this era of diminished middle-class expectations, the more realistic ambition is of one day attaining a bathroom of one’s own, i.e., life without a flatmate.

Yet even this modest hope is likely to elude many of us. Hundreds of thousands of Londoners (mostly young and many underemployed) are being forced to share apartments as rents keep climbing. And the trend is expected to continue for quite a while. Oxford Economics, which did the NHF analysis, predicts average rents in England will jump by more than 20 per cent in the next five years. Incomes, on the other hand? Not so much. According to the website uk.easyroommate.com, London now has a flat-sharing population of 653,000, including 23,350 who turned to sharing over the last year.

As a Londoner, I can tell you from anecdotal experience it’s completely normal for people here to live in shared rental accommodations well into their late 30s and 40s. In the EasyRoommate poll of 1,057 sharers, only 27 per cent said they could foresee buying a home in the next three years.

But there might be a silver lining in all of this for Generation Rent. In much of Continental Europe, lifelong letting is completely standard. And it’s often pointed out that, because of this lifestyle, the French and the Germans seem to enjoy their lives more—eating out often, taking extended holidays and moving house when it suits them—while the British are obsessed with interest rates, slaving away to pay down their mortgages.

Generation Rent will likely have to re-calibrate their expectations of middle-class home ownership, but once we do our lives may be all the better for it. Rosamund Urwin, a twentysomething columnist for the London Evening Standard, recently made the case for why younger Londoners ought to embrace our current standard of living. “Renting in London is exorbitant, but it needn’t be,” she wrote. “Rather than buying into the cult of home ownership—a cult which has surely been shown to be bogus—we should be building more properties specifically for the young to rent.”

But whether to rent or buy, Britain needs more reasonably priced housing to accommodate its burgeoning population—and needs it fast. To this end, Housing Minister Grant Shapps recently promised to release thousands of acres of public land for home building. “Despite the need to tackle the deficit we inherited,” he told the press, “this government is putting £4.5 billion [$7 billion] toward an affordable homes program, which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years.”

But the NHF dismissed the minister’s promise as misleading, saying it actually represented a cut of 63 per cent on affordable housing spending. Ruth Davison, NHF campaigns director, told BBC Radio that the government needed to up the ante or risk cataclysmic results. “Governments of all colour have not properly understood that we are in the grip of a housing crisis, and unless they do something about it, an entire generation will be locked out of decent housing.”


 

Why home ownership is becoming passé in Britain

  1. Ditto for Canada & those of us under 30.

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