Kate Hughes: Time to get a grip on the 'need' to own our property
Saturday 03 September 2011
It comes to something when normally law-abiding citizens start forging payslips to get a larger mortgage, risking a criminal conviction while they're at it. Apparently it's a "fraud for need, not fraud for greed" thing according to a spokesperson from the UK fraud prevention service CIFAS, but I'm not sure about the "need" bit at all. Despite a good two years of belt-tightening and wringing our hands, we're still not learning our lesson are we? And it's not like that lesson isn't a straightforward one – don't buy something until you can afford it, including property.
What doesn't help is this week's report from the National Housing Federation, whose press release described us as "plunging into an unprecedented crisis", warning that home ownership in England will slump to just 63.8 per cent over the next decade, the lowest level since the mid 1980s (apologies to the huge swathes of the UK population that it doesn't consider). Cue mass panic over not ever getting on the property ladder. Unlike many who lament a younger generation's bitter disappointment at being unable to follow their parents into glorious home ownership, I rent, so clearly I might as well end it all now.
Or not. If we all just hang on a second here, don't these figures simply mean we are returning to an historic norm? Perhaps even recovering an equilibrium artificially displaced by political policies designed to encourage a personal feel-good factor so we'll keep them in power? Yes, my generation has, in the majority, grown up with parents who own the property they live in, but they were broadly our age in the exceptional 80s. In separate figures, between 1971 and 2002, home ownership increased from 49 to 69 per cent, with most of the increase occurring in the 1980s and has levelled off since then. What does that tell you? Any defining Thatcher policies spring to mind?
In fact, research from the House of Commons which tracked UK statistics over the 20th-century shows that owner occupation of property shot from 10 per cent of homes in 1900 to 68 per cent of homes by 2000. As you might expect, private rented property fell from 89 per cent to 10 per cent at the same time. That of course means that if ownership levels did fall to 63 or 64 per cent by 2021, we wouldn't be too far off the position we were in before the growth years of 2000-2008.
So what if more of us did rent? Yes, the market would become more expensive, but it might make us revive the lost art of budgeting. And yes, the psychological wealth effects of owning property that is gradually increasing in value would be subdued. It means we probably wouldn't use our homes like cash points, mentally drawing down perceived equity to ease our credit card pangs, and getting ourselves into that old trouble again, that's for sure. Not great for the economy if we didn't all spend, I grant you. But (and I acknowledge at this point that I'm no economist) wouldn't a more balanced rent/ownership society reduce the likelihood of property bubbles and the wider effects of boom and bust cycles? And if we didn't all own property that tied us to one place, wouldn't the labour market be more fluid as we would be able to move to jobs rather that have to wait for them to come to a town near us? We're not talking about the entire population renting here either, we're talking about a third, give or take.
We know there are several models for a far higher proportion of renters right on our doorstep. It's a comparison that gets rolled out every time the housing market twitches, but I just can't help myself seeing as European Commission figures show that in Denmark, the Netherlands, Sweden and Austria, for example, just over half the homes are owner-occupied. They all have AAA ratings - concrete ones. Nope, the view from my rented flat is that the sky just isn't falling in.
Mind the gap: female workers play it safe
The latest revelations on the pay gap between men and women should come as little surprise to the 82 per cent of women who have never asked for a pay rise.
The Chartered Management Institute revealed a £10,000 discrepancy between men and women in the same role this week, but Brits simply don't dare ask, according to research from Scottish Widows, which found that 28 per cent of men and only 18 per cent of women have ever done so.
Almost half of Brits are unwilling to discuss their salary with colleagues and 15 per cent won't even disclose it to family. Only 43 per cent were happy with their take-home pay, but 11 per cent said they haven't brought it up as they were too embarrassed.
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