20 April 2013

Why aren't young people in England angry about housing?

Apologies for being such a bore, but it drives me nuts that we aren't building enough houses in this country. Every year there are twice as many new households as there are new houses built. Every year. This is the first lesson of economics - prices are set by supply and demand - if demand continues to outstrip supply twofold every year then prices will continue to increase and houses will continue to be split into ever smaller fragments. I rented a beautiful apartment last month from a young married couple, both Oxford graduates, one of them a doctor. It was beautiful, except it was also quite symbolically the converted basement of a much more beautiful house above it. Even the most successful people of my generation are doomed to living in the basements of our parent's generation.

And yet simply building more houses, in the places that people want to live, and yes occasionally on some muddy field in a part of the greenbelt, would create jobs, reduce prices, reduce the housing benefit bill, and create all sorts of new positive dynamic externalities as places like Oxford are allowed to follow their natural economic geography and increase in density of smart people. But when the university does try to build more housing, on brownfield land next to the railway in the centre of town, campaigners complain about ruining the skyline. Not even building on "greenbelt," not destroying animal habitat or some beautiful piece of land itself, but obscuring the view of a church spire. Why aren't young people angry about the miserable hovels we are forced to live in? Most of us have been lucky enough to escape Britain at some point in our lives - we've seen the possibilities of better cheaper housing that exists in almost any other country in the world. Where is the angry youth pro-building lobby?

And now in addition to already having the smallest and most expensive houses in Europe to choose from, my  search in Oxford is thwarted by "Housing in Multiple Occupation" rules. Any rented house with more than one "household" in it needs to be registered, with increased legal obligations on the landlord, which means lots of landlords just don't want to bother registering, and so can't or won't rent to a group of young professionals instead of a family. So after being priced out of getting our own houses and basically forced to share because of government planning regulation, we're now thwarted in attempts to find a house which the government will allow us to share because of yet more well-meaning but utterly self-defeating regulation. Here's a better way to take power from landlords and give it to renters: Build. More. Houses.


hen said...

Try filling all the empty ones first!

David King said...

I couldn’t agree more. The situation today is ludicrous. The average age of first-time buyer is now 37 years old (it was 24 in the 1960s) and the average house price has risen from £80,000 in 1975 to £238,293 today. With median age of home ownership being somewhat higher than 37, the country has effectively seen a £150,000 wealth tax transfer from today’s young generation to the generations above.

Furthermore, this isn’t the idyllic Daily Express utopia where every Englishman’s home is his castle, but with owner-occupancy rates now as low as 66%, we have created a class of landlords not too dissimilar from Ricardo’s landlords during the Corn Laws. Like in the 19th Century, in current day UK, landlords truly are the unique beneficiary in the organisation of our society. Workers work, for which they are paid the wage; capitalists run the show, for which they gain a profit; but the landlord benefits from our current housing shortage, and their income – rent – is not currently being held in line either by competition or the power of the

They have gained at everyone else’s expense, adding very little, if any, real value to the economy. As population has expanded, due to the relatively fixed supply of housing, any gains in wage or profit have been squeezed from individuals by landlords who adjust rents or property values accordingly. Nor has this just been the situation of the recent crisis, but ever since house-building didn’t keep in line with population after MacMillan’s government.

In the same way that 19th century landlords fought tooth and nail to keep cheap grain out of the country, we now have the
strongest electoral base for political parties being home-owners over the age of the first time buyer. These individuals have a much greater incentive to save the nightingale than first-time buyers. As such, like your article suggests, there really is little chance of this changing unless young people get angry about housing.

Laura Gordon said...

There's a campaign group called Priced Out that's trying to do something about this - pretty small but hopefully growing. But yes, you're right, the green belt laws are stifling the country, especially in somewhere like Oxford which is growing very fast, has an unusually tight green belt, and where most of the non-greenbelt land that hasn't been built on is flood plain. And then there are the Nimbys... unfortunately the reaction of the Oxford City Council to the housing crisis has been not to try and address supply, but to try and drive out multiple occupancy. It's a type of divisive politics that contrasts 'students' and 'families' - when you go out on the doorsteps, people genuinely don't understand that many people in multiple occupancy are not students.

Interestingly, another part of the problem is that most of the greenbelt isn't in the Oxford City Council area, it's in the surrounding councils, and they have no incentive to try and build anything because it isn't their housing problem.

And then the last big point is that young people ARE angry about it, but they don't vote. Old people vote, and old people want their property prices to stay high. And because young people don't vote, the government never bothers to try and help them. So some kind of really big get young people voting campaign is probably an important first step towards getting the government (whichever party is in government - on this kind of stuff they're all the same) to do something about the housing issue, and other generational justice issues. As an aside, I actually think this is one of the tragedies of the coalition - until the last election the Lib Dems were groping towards an understanding of the whole issue of intergenerational justice and they had the potential to be a party that could inspire and represent the younger generation, but now that they've got into power and become faceless clones then there's no-one that has the potential and the position to do it.

Wildlife News said...

And the real tragedy is when young people actually do something practical to put a roof over their heads the council comes along and threatens to demolish it.

It's a bit late for your to offer support in the planning application but it's still worth reading a watching the video about this young family who built their own low impact strawbale house for under £15,000 only for planners to recommend it gets demolished for being 'harmful to the rural character'.

Post a Comment