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Widening of property gap would be harmful

There is a long way to go before we become a nation or renters.

There is still a strong cultural sense in British life that owning your own home is something we should aspire to. It is seen by many as part of life's journey and a source of financial security, a sense reinforced by the media and advertising.

The economic recovery on which the UK Government is pinning so much relies heavily on the health of the housing market. However, the love affair with home ownership is not so strong among many young people, according to a report from the Halifax. Almost one in five 23 to 27-year-olds have no desire to own their own home, and attitudes are changing. Nearly half of all those surveyed think the country is warming to home rental.

Meanwhile, traditional reasons for favouring ownership, including financial security in retirement, an inability to settle in an area when your home is "only" rented or wanting to raise children in a home you own are diminishing according to those surveyed.

The context for this is important. Renewed fears of a housing bubble have been reinforced by soaring house prices in many parts of the UK. Incomes are static and other costs are rising. All of this means new entrants to the housing market will pay 10.5% more for a home today than they would have done a year ago. So are people opting for the rental market, or are they being forced?

There is nothing wrong in principle with fewer people owning homes and more choosing to rent. But for a lot of people this is not a choice, but the result of a complex range of factors.

These include, but are not confined to the rising cost of living, low or depressed pay rates, a lack of savings or the ability to save and high demand based on widespread shortages of housing supply.

The British devotion to buying property is not replicated in all parts of Europe, of course. Other European countries do not have the same levels of home ownership we do, and yet their economies and households thrive. Germany, where around 52% of people rent, is the healthy economic heart of the Eurozone. Denmark, where 42% rent is recognised for its high levels of social mobility.

Indeed, there are significant advantages to cultures where people do not root themselves in bricks and mortar. Workers are more mobile and more readily seek opportunities in different parts of the country. Property bubbles and the overheating and cooling of the economy are avoided. Tenants tend to have better rights and landlords more duties. A growing, fair, affordable private rented sector could be good for Scotland.

There is talk, once again, of Generation Rent and, if a shift does come, it is likely to be generational.

There is a danger here. We place too much economic dependence upon property but if change is driven by low pay and lack of opportunity it will lead to a gap, not only in terms of economic power but also in terms of age. Flexibility and choice about whether to rent or own is desirable. But if it leads to such increased inequality, it can only be harmful.

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