IT'S hard to believe, but there was a time when you could pop along to your local Northern Rock, sign up for a Together mortgage and secure a whopping 125% of the value of your home.
That deal now belongs to a kind of fantasy world: one for which, almost in spite of ourselves, we can't help pining. Today, all the talk is of "Generation Rent", the under-40s who find themselves excluded even from the very first rung of the property ladder. Two in five young Scots believe they will never own their own home, according to a survey published last week.
This is spoken of as a tragedy. Yet there are many worse fates than not getting caught up in the illusions of security and gain attached to property ownership and speculation. Before Generation Rent sheds too many tears, it might want to ask the question: what are we really losing out on? After all, many of the benefits promised by Margaret Thatcher's "property owning democracy" have proved sadly elusive.
Take the social mobility that is often said to come with home ownership. The last 30 years of our existence as a property-owning culture have brought us not increased mobility, but social inertia and a widening of the gap between rich and poor. The fact that only young people with parents rich enough to fork out a hefty deposit can get onto the first rung of the ladder, might actually entrench this inertia. And a glance outside the UK casts doubt on the notion that home-ownership increases social mobility. Denmark, which has the highest social mobility in Europe, has almost the lowest proportion of owner-occupiers, at 53%.
Then there is the notion that as a nation of home-owners, we would feel like we had more of a stake in society and our local communities. By most accounts, the property boom coincided with a period of social fracturing. Instead of cosy community, we got nimbyism, neighbourhoods evaluated according to house prices, and a population that was preoccupied with whether a state-of-the-art shower would pump up the value of their home. The newspaper property supplements and TV boom in programmes such as Location, Location, Location, were testimony to an obsession with milking every little bit of value out of every square inch of our bricks and mortar.
Property also became intrinsic to the notion of the good life. You only have to watch those Lloyds TSB animated adverts with their whimiscal Pinocchio-nosed characters to see this. The tagline is "for the journey", and it's clear that the life journey we are all meant to aspire to includes having children, buying a home, and going on nice holidays with an air-miles scheme. In their mortgage advert, a train sets off on its tracks, then splits into multiple small carriages, which all diverge off on their own route to end at elegant, magical houses with "sold" signs outside. This, of course, is not such a bad journey. For those who want a house to be no more or less than a home, it is very valid. But all those "sold" signs stand for something else too. They are also the signposts of speculation. They belong to a dream of a world in which we can find both the funding for our current extravagances and the security for our old age in the bricks and mortar of our homes.
Given this, we have to ask ourselves if this Pinocchio-nosed dream really is something we want to pass on to Generation Rent. Shouldn't we instead be pushing for young people to simply have access to affordable homes, both rented and bought, at costs that are not such an extraordinarily huge proportion of their earnings? Shouldn't we want good social housing? Shouldn't we also want our young not to be prey to the trap of easy credit, and of extravagant consumerism funded through borrowing against property?
My feeling is that one of the reasons we bemoan the tragedy of Generation Rent almost more than they do themselves is that actually we are all still too much in love with the way things were. We have too much invested in property ourselves. Those of us already on the ladder – and I am one, though someone who bought at the wrong time – want to believe home ownership can be our security, the goose that lays the golden egg. We want to hear that house prices are vaulting skywards once more.
We want this, but we don't want to look at what it means. We don't want to acknowledge that house prices rise only because demand exceeds supply, and that for this to happen we need an expanding population, and that never-ending population growth is yet another Pinocchio-nosed dream. Earth's resources are finite, no matter what some say.
So maybe we shouldn't wish upon Generation Rent all that Generation Credit once had. Fun as it was – and it's easy to see why many of the current young have the feeling they were born too late – it wasn't pretty. In John Lanchester's financial crisis novel, Capital, he draws parallels between a rapidly gentrifying London street during the house price bubble, and an oil rush. "All people had to do was sit there and imagine the cash value of their homes rattling upwards so fast that they couldn't see the figures go round," he writes. This passage reminds me of a conversation I had back in 2000, with a friend who marvelled that he might make far more money just buying a house than he could ever make working and saving.
Many of us still believe in this possibility. But we need to let go of it, and resist passing it on to Generation Rent. After all, in the truly longer term, for the generations further down the line, believing in a never-ending property boom upon which our financial security can be founded is just creating yet another bubble. And inevitably, one day it will burst.
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