Do we actually want to be a society of homeowners?

High rates of home ownership have large negative effects on the labour market. Why are we trying to boost it?

It is widely understood that Britain's housing market is (how to put this delicately) sub-par.

Nearly everyone agrees that there are problems which need fixing. We have a society built around homeowning, in which the average age of a first time buyer is inexorably rising. We have a social housing system which involves the state paying rents to private sector landlords, even as private sector rents are rising faster than inflation. We have a planning regime which is slow enough to deliver judgments that it encourages developers to create "banks" of property with permission, just in case the time comes to build. And widespread as these problems are, they are an order of magnitude worse in London and the South East.

But while there's agreement on the problems – and much discussion about what policies might ease them – there's far less examination of what the ideal housing market would look like.

Would homes be owned by individuals, companies or the state? Would multifamily accommodation (blocks of flats, in other words) make up a higher proportion of the housing mix, or is our love affair with the house permanent? How acceptable is flat sharing? What about room sharing? What are the minimum standards we should accept from new builds? Is the problem that mortgages aren't available, or that house prices are too high? Is the solution to insecure tenancies more secure tenancies or fewer tenancies full stop?

These questions seem uncomfortably micro-level to be discussing, but at least some of them are crucial to answer before we can make a real stab at implementing effective reforms to housing policy. And the most important one of all is the one which no-one wants to address: why do we want to own our own homes?

Obviously, given current policy, the answer is clear. The last two decades have been about shoring up the housing market, guaranteeing house prices will never fall, and making it easier to buy in. Conversely, renting has remained as insecure as ever, but with more and more people renting more and more houses, it's a landlord's market.

But if policy could be reformed to make it harder to buy a house but in a way which made renting a far better choice, should it?

One way to answer the question is to look at the wider effects of owning or renting your home. A paper from our own David Blanchflower and the University of Warwick's Andrew Oswald does just that, examining the effects of high rates of home-ownership on one aspect of the economy: the labour market.

Oswald argued twenty years ago that a lot of people owning their own houses would result in higher rates of unemployment. The reasoning is intuitive: a home is a burden, keeping you tied to one place; and a mortgage keeps you tied to a minimum salary. Insofar as it is easier to move out of a rental property than it is to sell a house and buy a new one, we would then expect people who own homes (all else being equal) to be less flexible about the sort of work they can take – and so we'd expect them to be more likely to be unemployed.

Aggregate it up, and we would expect economies with higher levels of home-ownership to have higher unemployment rates. And that's what Blanchflower and Oswald have found:

We find that rises in the home-ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state… A doubling of the rate of home-ownership in a US state is followed in the long-run by more than a doubling of the later unemployment rate.

Oswald's 1990s argument is backed up by the fact that areas with higher ownership have lower mobility – as we would expect – but there are two further effects that the authors find.

The first is that high home-ownership areas have longer commute-to-work times. That could be because home-ownership tends to promote less dense housing, due to the difficulties in selling rather than renting multifamily accommodation, and the contrary difficulties in renting rather than selling single houses.

The second is that high home-ownership areas have lower rates of business formation. The authors speculate that "this may be due to zoning or NIMBY effects", and offer it as a point for future research.

The conclusion, that "the housing market can generate important negative externalities upon the labor market", poses some tricky questions for nearly everyone discussing housing policy in Britain today. We may still want to build more, lower rents, and improve quality of life for tenants; but this research suggests that, rather than making it so that more people can buy their homes, we should make it so that more people don't feel like they have to buy their own homes. In short, make renting fairer, not buying easier.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: National Theatre
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I hate musicals. Apart from Guys and Dolls, South Pacific, Follies – oh, wait

Every second is designed to be pleasing, so that by the end my face aches from all the smiling.

I always thought I hated musicals. Showy, flamboyant, and minutely choreographed, they seemed to be the antithesis of the minimalist indie scene I grew up in, where a ramshackle DIY ethos prevailed, where it wasn’t cool to be too professional, too slick, too stagey. My immersion in that world coincided with the heady days of Andrew Lloyd Webber’s triumphs in the West End – Evita in 1978, Cats in 1981 – neither of which I saw, being full of scorn for such shows.

From then on I convinced myself that musicals were not for me, conveniently forgetting my childhood love of West Side Story (for which I’d bought the piano music, bashing out “I Feel Pretty” over and over again in the privacy of the dining room, on the small upright that was wedged in behind the door).

I was also conveniently forgetting Meet Me In St Louis and A Star is Born, as well as An American in Paris, which I’d been to see with a boy I was actually in a band with – he somehow finding it possible to combine a love of The Clash with a love of Gene Kelly. And I was pretending that Saturday Night Fever wasn’t really a musical, and neither was Cabaret – because that would mean my two favourite films of all time were musicals, and I didn’t like musicals.

Maybe what I meant was stage musicals? Yes, that was probably it. They were awful. I mean, not Funny Girl obviously. When people ask “If you could go back in time, what gig would you most like to have attended?” two of my answers are: “Judy Garland at Carnegie Hall, and Barbra Streisand in the original 1964 Broadway production of Funny Girl.” I would, of course, also make an exception for Guys and Dolls, and South Pacific, and My Fair Lady, and… oh God, what was I talking about? I’d always loved musicals, I just stopped remembering.

Then one of our teens took me to see Les Misérables. She’d become obsessed with it, loving the show so much she then went and read the Victor Hugo book – and loving that so much, she then re-read it in the original French. I know! Never tell me today’s young people are lazy and lacking in commitment. So I went with her to see the long-running stage version with my sceptical face on, one eyebrow fully arched, and by the time of Éponine’s death and “A Little Fall of Rain” I had practically wept both raised eyebrows off my face. Call me converted. Call me reminded.

I was late to Sondheim because of those years of prejudice, and I’ve been trying to catch up ever since, keeping my eyes open for London productions. Assassins at the Menier Chocolate Factory was stunning, and Imelda Staunton in Gypsy (yes, I know he only wrote the lyrics) was a revelation. Here she is again tonight in Follies at the National Theatre, the show that is in part a homage to the era of the Ziegfeld Follies, that period between the wars that some think of as the Golden Age of Musicals.

Although, as Sondheim writes in his extraordinary book, Finishing The Hat, (which contains his lyrics plus his comments on them and on everything else): “There are others who think of the Golden Age of Musicals as the 1950s, but then every generation thinks the Golden Age was the previous one.” How I would have loved to have seen those shows in the 1970s, when they were new and startling.

They still are, of course, and this production of Follies is a delight from start to finish. A masterclass in lyrics – Sondheim’s skill in writing for older women is unmatched – it is also sumptuously beautiful, full of emotion and sardonic wit, switching between the two in the blink of an eye, in a way that appears effortless.

And I realise that what I love about musicals is their utter commitment to the audience’s pleasure. Every second is designed to be pleasing, so that by the end my face aches from all the smiling, and my mascara has somehow become smudged from having something in my eye, and I have already booked tickets to go again. So sue me.

Tracey Thorn is a musician and writer, best known as one half of Everything but the Girl. She writes the fortnightly “Off the Record” column for the New Statesman. Her latest book is Naked at the Albert Hall.

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left