“Conservative thinkers popularised the idea that workers can be convinced not to join the revolution if they own a house with a nice garden”

In the decades that followed, successive governments enacted a series of major reforms in order to widen access to the benefits of homeownership. Taxes on land and property were removed, and subsidies for home ownership were introduced.

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Is it time to end our obsession with home ownership?

medium.com

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This blog is a follow up to the recent event ‘The global housing crisis and the home ownership myth’ . The event is part of IIPP’s ‘Who owns what and why’ series. The recording of the event can be watched here .

A ccording to the IMF, the Covid-19 pandemic triggered the deepest global recession since the Great Depression of the 1930s. Millions of people have lost their jobs or been furloughed, while thousands businesses have been pushed to the edge of bankruptcy.

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If the ‘property owning democracy’ is failing, why are politicians still so committed to it? Part of the reason may stem from a widespread belief that high levels of homeownership are somehow related to economic success. However, examples such as Germany, Switzerland and Austria, which all have homeownership levels below 50%, demonstrate that high levels of homeownership are not a prerequisite for a prosperous society. Meanwhile, many of the poorest countries in Europe (e.g. Romania, Lithuania and Bulgaria) have among the highest levels of homeownership.

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Today the idea that increasing home ownership is desirable is almost universally accepted across the political spectrum. But this wasn’t always the case. As Sebastian Kohl, Senior Researcher at the Max Planck Institute for the Study of Societies, explained in the webinar, the idea that home ownership is a superior form of housing tenure can be traced back to the aftermath of the First and Second World Wars, when political leaders viewed increasing homeownership as essential for maintaining social harmony and staving off the threat of more radical political unrest.

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The case for the ‘property owning democracy’ was always predicated on the assumption that the benefits of homeownership could be expanded to ever growing numbers of people. But as Brett Christophers, Professor in the Department of Social and Economic Geography at Uppsala University, highlighted in the webinar, it’s clear the project is now failing on its own terms.

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Although the aim of this agenda was to increase homeownership, the primary effect was to transform land and property into a lucrative financial asset. Since 1995 alone, the value of Britain’s housing stock has increased by over £5 trillion ­– accounting for three-quarters of new household wealth . In the early 2000s, house price inflation was so great that 17% of working-age adults earned more from their house than from their job.

For those who own property, this has provided enormous benefits. But for those who don’t, it has come at an immense cost.

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“Conservative thinkers popularised the idea that workers can be convinced not to join the revolution if they own a house with a nice garden”, Kohl explained.

In the UK, the Conservative Party began to embrace the vision of a ‘property owning democracy’ in 1946, after the Labour Party won power on a promise to undertake a vast program of public home-building. The term ‘property owning democracy’ was borrowed from Noel Skelton, a Scottish lawyer who coined the term in 1923 in a series of articles for the Spectator magazine.

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