Let’s examine the best possible ways to resolve the current housing crisis in Britain, starting from the viewpoint of Baroness Thatcher, arguably the most successful Premier of the post war era.
How might Margaret Thatcher have dealt with the housing crisis unfolding across Britain?
I think that we can reasonably accurately guess the stance she might take by considering the main benchmarks which were directing her political compass in the Seventies.
Her campaigning for housing reform resulted in the Housing Act 1980 which gave security of tenure, and controversially, the right of social tenants to buy the homes which they lived in.
From this we can reasonably assume that she held the view that every family should be responsible for their own housing by having ownership of the houses in which they live.
As a result she would’ve been uncomfortable with the idea that those who couldn’t manage financially, should enjoy housing provided by those who can.
Assuming this, one can see that her ultimate goal appeared to be to create a home-owning democracy spreading to all quarters, whilst not unduly marginalising those who can’t get started with home ownership.
On this basis, it would appear to be wrong for government and various local government organisations, including Housing Associations to carry on attempting to provide part ownership-part rented housing, as some form of essential, yet seriously flawed, stop-gap.
All this can do in effect, is to countenance a continuance of the previous lack of affordability in housing because by using such policies, prices must have to find the highest level within a subset of what are ‘totally unsatisfactory‘ ground-rules. This leads me to the thought:
What if a different method could be used?
Could housing be provided without part ownership schemes?
We currently have one important advantage today which was not available to buyers in the seventies. It relates to the level of interest rates.
In today’s housing market, borrowing money has never been cheaper and interests rates have never been lower, so now would be the perfect time to switch from organisations taking money for rent, to prospective occupiers of houses being lent the money for them to buy the house they live in outright.
Surely this would be the ultimate Thatcher goal and the reverse of the existing half-baked idea of first-time buyers having to pay an equivalent-sized mortgage repayment chunk of money every month to organisations that are only giving them part ownership at similar price levels!
The whole idea of part ownership and so-called ‘affordable’ homes should now be cast aside so that the final frontier of widespread home ownership could be brought in much more quickly.
Having witnessed the expansion of the private rented sector since the seventies, we now know with certainty that this sector has not and can never provide a similar degree of freedom security and support to that offered by outright home ownership and, it is also fair to say, neither can large scale council housing ever achieve this.
Shortly after the decision was made by Conservatives to promote the sale of council houses to their occupiers in the mid seventies it soon became clear this was a very popular winner all over post-war Britain.
Of course housing authorities would still need to retain some council housing but at nothing like at the scale it used to be, if widespread home ownership should become mainstream once again.
Now is the right time to expect the market economy to provide a high degree of home ownership to the majority.
Forget part ownership / part rental schemes, for they are exactly just that just – schemes. Everyone wanting houses to live in should go for full ownership at prices below or similar to the existing cost of renting.
This way, most families would be empowered to take control of their own housing requirements and enjoy a brighter future.
The only question now remaining is, how could all of this be achieved?
The way such dramatic progress in home ownership could become a reality today would be by changing the way all residential property is handled by house agents. We need a whole new system where everybody who wishes to, could go out and buy a place of their own at prices that are truly market compatible.
The present house price crisis is not because of a shortage in housing nationally. That is not why house prices have been escalating. There is a more fundamental reason. It is because of the imperfect way in which estate agents currently deal with house sales. This is the main cause of the current house price crisis. A better way of describing the present housing crisis would actually be to describe it as a house price crisis.
A sea-change is therefore needed in residential estate agency methods. This is the final conclusion.
Will politicians and their policy makers please take a good hard look at this aspect of the problem and engage in detailed discussions about the merits of bringing the changes I outline here to fruition, because now is the opportune moment for doing this.
It is now a matter for our elected government to resolve this.
It is they who should act to secure the future wealth and security of the house-owning general public.
To read about how this very special change could be put into effect, please follow the link below to a set of pages which fully explain this:
What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?
Constructive comments are very much welcomed.