As one of many working people with no prospect of ever being able to buy a home in their lifetime, I welcome your editorial (The Guardian view on a property-owning democracy: Tory dream becomes a nightmare, 12 January). Large numbers of us have been suffering from this inequality-fostering system for 20 years or more, but it is only now that it is affecting upper-middle-class circles that it is being talked about.
Those on the left should not kid themselves, though – property ownership as a way to make money and to go up that toxic ladder has not just been a Tory dream (just take a look at the comments from Guardian readers under the editorial).
Yes, this has been a model of “society” imposed on us by Margaret Thatcher, but it has been largely embraced by those on the left and on the right who are lucky enough to have inherited capital or a salary that the majority of us can only dream of ever earning, and who have simply been too weak to resist the call of individualistic profit by taking part in a system they fully know is not fair.
Let us be clear: the current crisis and the growing chasm between the inheritors of property wealth and the rest of us is not the effect of a left/right divide, it is the product of class exploitation.
• Will we ever learn? As your editorial notes, the dream of a property-owning democracy has inflated prices and had a ripple effect, forcing up private-sector rents. As a result, both ownership and renting have become unaffordable, and those who have paid off their mortgage have benefited at the expense of renters and the younger generation.
The obsession with home ownership was the primary cause of the 2008 financial crisis, and countries that followed this path suffered most. However, home ownership rates in Germany, Austria and Switzerland have remained far below those in the UK, and housing there is seen as a social asset, not an investment. The way forward is to promote a diverse range of tenure options, including co-operatives, co-housing and public rental. Investment can then focus on more productive sectors of the economy.
• It’s time to stop talking about the property-owning democracy. As a political ideal, it was only ever going to work if you could align the long-term stability of political institutions, household incomes and the value of homes based mostly on their utility value. In freeing up capital markets, Thatcher and Reagan created conditions in which that could never happen. Any land economist could have told them what was likely to ensue.
Old-style building society managers used to effectively control local land markets and house prices. No housebuilder would have begun a new development without being sure that local building societies would lend on the homes they built, based on conservative assessments of local incomes. “Freeing up” mortgages removed that control. The natural tendencies of land and property prices to rise during any business cycle were turbocharged, leading to the crashes of the late 80s, 2000s and – probably – now.
Supporting private landlordism of unaffordable, unhealthy and unsustainable homes is economically illiterate. Building more affordable homes at many price points linked to incomes would make a real difference. Shame we’ve never had a chancellor who even knows what land economics is.
Land economist, London