Where on earth are we all going to live?

Our national obsession with property has led us into dangerous waters. At every level of the market

The British have a special relationship with their homes. We lavish attention on them; we fantasise about an extension here, a conservatory there; we willingly pay over the odds for a place to live because, almost regardless of social class, home ownership has become the ultimate national objective.

Now, this live-in liaison is facing its sternest test. In the course of the past decade, house prices have risen inexorably. First-time buyers are unable to get on to the housing ladder until well into their thirties, and there is a worrying lack of available housing - both for key workers and well-off families. Interest rates have risen four times in the past year. No wonder some commentators are predicting a house-price crash. The government is facing a desperate need for more new homes; the issue of extra taxes for buy-to-let landlords; proposals to overhaul Britain's archaic planning system and build over the green belt; and the looming question of how to mop up the mess left after the housing bubble pops. Housing is shaping up to be one of Gordon Brown's biggest headaches.

Britain's property obsession is a relatively new trend. Until the First World War, only a tenth of UK homes were owned by their occupier, compared with almost half in the US. This was partly because much of the property was owned by the richest members of the population, but it was also partly a social phenomenon. Even the wealthiest young men would prefer to take rooms - lodgings - rather than buying or renting their own properties when coming to London. In most circles it was perfectly normal never to own your own house.

Things changed after the world wars, as successive governments embarked on policies to find "homes for heroes". Controls were imposed on landlords and millions of pounds were poured into homebuilding projects. Meanwhile, inequality was falling, meaning many more middle-class families were suddenly able to afford to buy a home.

Amid the postwar optimism of 1950s Britain, home ownership slowly but surely became enshrined as a talismanic social objective, along with free health care, free education and low unemployment. The apogee was Margaret Thatcher's right-to-buy scheme, which saw thousands of council tenants buying their homes. All of this contributed to a sharp rise in home ownership. One government after another introduced lucrative tax breaks on mortgages, with the result that owner occupancy soared, recently reaching an all-time peak of 70 per cent. It was one of the biggest social and economic transformations in British history.

Britain's relationship with housing is not unique. In terms of home ownership, France is fast catching up and we remain far behind Spain. It is true that elsewhere in Europe, such as Germany, Switzerland and the Netherlands, more people tend to rent than buy. But this is due less to an ingrained cultural reticence about home-buying than to laws that make it more financially attractive to rent. Few realise just how much Britain's property-owning fixation was engineered by successive government's policies.

As prices have shot up it has slowly dawned on us that, as well as being nice places to live, homes can also make excellent investments, an idea which has only intensified our love affair with property. In the past few years, though, something has changed. After decades in decline, the proportion of people renting rather than buying a house stopped shrinking and is now rising faster and faster.

One reason is that those not yet on the property ladder are finding it all but impossible to afford to buy. But another more intriguing explanation lies in the fact that both Conservative and Labour governments have scaled back and abolished most of the tax breaks that pushed up home ownership in recent decades. Swiftly and silently, they have shifted the economics of property in favour of landlords rather than tenants for the first time since early last century. As a result, the shape of the market is slowly changing. More and more relatively well-off families are investing in property, often because they have seen the value of their pension fall and are looking for an extra source of income when they retire.

Landlords are already provoking resentment and, as their share of the market grows in the coming years, they are likely to become even more unpopular. A buy-to-let backlash seems highly likely in the future - Whitehall, sensitive to this, has already mooted a clampdown on landlords' unpaid tax. The influx of new landlords is not only crowding many potential buyers out of the market, it is also distorting the kind of homes available. Most of the new flats being built these days are targeted directly at buy-to-let investors - utilitarian blocks that are easy to let and cheap to maintain. For a number of years now, too few homes are being built with families in mind. This is intensifying the housing shortage on an island that is rapidly becoming one of the most overpopulated in the world. At the top end of the market, there are not enough homes with more than two bedrooms and even too few palatial properties for the financiers and jet-setters moving to London. Meanwhile, the flats that would only a few years ago have been affordable for the less well-off have shot up in value.

According to the National Housing and Planning Advice Unit, unless more houses are built, prices could be ten times the average buyer's salary within 20 years, compared with around seven at the moment. The average age of a first-time buyer has risen from 26 to 31 in the past decade alone, according to the Council of Mortgage Lenders - a sure sign that millions of young people are being priced out of the market. The Bank of England has reported that the number of new mortgages issued has dropped suddenly, indicating that prices are also simply beyond the reach of many families.

The two key measures that most economists regard as the best gauges of affordability are both flashing red. Mortgage payments are now taking the biggest chunk of salaries since the tail-end of the last crash. Meanwhile, the fact that house prices have dramatically outpaced the growth in rents means anyone thinking of leaping into the buy-to-let sector is likely to have to turn in a loss for at least a couple of years before they start seeing returns. In other words, the financial rationale for homebuying is the weakest it has been in a generation. But, of course, this being a cocktail of love and money, people are still buying - thinking with their hearts rather than their heads.

Many parts of the country are already experiencing a slump. The Yorkshire and Humberside region, for instance, is witnessing the biggest drop in prices for at least seven years. Four interest rate increases by the Bank of England in the past year have simply made many peoples' mortgage payments unaffordable. The fact that taxes and the cost of living have risen sharply has only made things worse. So the demand for housing has dropped suddenly, causing prices to stall. Whether there is a slowdown or a more dramatic crash, it is clear that the decade-long boom is almost over.

As the end of the era approaches, a few conclusions are emerging. If the government wants to arrest the decline in home ownership and cool the market, it must follow the example of its post-war predecessors: build new homes and introduce tax breaks for homebuyers. Waiving stamp duty for first-time buyers would be a simple and relatively cheap initial step. But a more radical option would be to allow home-ownership levels to decline naturally to those found on the Continent.

There are, after all, plenty of reasons to believe our obsession with homeowning is pretty unhealthy. Andrew Oswald, professor of economics at Warwick University, argues that too many of us own our homes. This causes serious damage to the economy, he claims, since it loads us all up with debt and prevents us from moving from city to city when different jobs beckon.

Abandoning the goal of widespread home ownership could be politically dangerous for any government. It would certainly be a bitter pill for the public to swallow. But given how torrid and irrational our relationship with property has become, it looks an increasingly attractive option.

Either way, if house prices do crash, it will be an important reminder for the British public that this love affair will never run smoothly.

Edmund Conway is economics editor of the Daily Telegraph

Case studies

  • Advertising planner Beth, 25 and her boyfriend found the pace of the market forced them to rush buying their first home. “Getting together the money, not only for the deposit but for all the extras, like solicitors and surveys, was difficult. Ideally we would rather have carried on saving in order to accumulate a larger deposit, but seeing house prices rise daily, made us decide to get on the market as quickly as we could. In the end we were very lucky to find a two bedroom maisonette that we could afford, but only because it needed a lot of work doing!”
  • New mother Kate, 32 and her husband may move to Oxford because of the lack of affordable family housing in London. They had hoped to move to a bigger property from their two bedroom house near to where they currently live to make room for their new family “We had a problem with every single house we looked. They had gone within hours. We only managed to get viewings at three houses because they were going so quickly. There's definitely a shortage of good houses, there are houses that need work but to get one in a good state there seems to be nothing below £700,000.”

This article first appeared in the 25 June 2007 issue of the New Statesman, Israel, Gaza and a summer of war?

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The fish-eaters and the fasters

With a population split between whites and Asian Muslims, in some ways Nelson in Lancashire feels like similar-sized towns in Ulster: two communities separated by a gulf of non-communication.

In the late afternoon of local election day this month, the chairman of Nelson Town Council was working the terraces of old cotton weavers’ houses on his patch. Sajid Ali was wearing a red rosette and a navy blue cardigan over his capacious white shalwar kameez, and what looked like his dancing shoes.

This was not the forlorn ritual of unanswered doors, blank looks and curt responses habitually experienced by Labour canvassers even in more promising political times. Along these streets Sajid is a figure of some consequence: a jolly fellow and, as one opponent put it, an “interesting character”.

Almost everyone was in; Sajid knew almost all of them; and they in turn understood what was required. Sometimes a quick burst of Lancy Punjabi did the job: “Salaam alaykum, yoong maan, how yer doing? What time yer coomin’ to vote?” To older voters his spiel would be entirely in Punjabi and the response would often be a head-wobble, that characteristic south Asian gesture, which, when given to Westerners, can be baffling, but in these cases clearly signified solid intention.

The Labour candidate in the Brierfield and Nelson West division of Lancashire County Council, Mohammed Iqbal, held his seat comfortably on the day his party lost control of the county. And he did so on a poll of 58 per cent: a far higher turnout than in any of the other, whiter areas of Pendle; the highest in Lancashire; and higher than wards with these demographics would usually expect even at a general election. The average across Lancashire on 4 May was 37 per cent. It seems reasonable to conclude that the votes from those of ­Pakistani heritage, marshalled by Sajid, were wholly responsible.

Nelson is a strange, sad, divided, forgotten old cotton town, not without beauty. The weavers’ houses are stone not brick, which, elsewhere, might make them rather chic. A few minutes from town is wonderful Pennine countryside, and to the north the view is dominated by Pendle Hill itself, brooding like some sleeping sea monster.

Pendle is both the borough council and the constituency, where the mix of urban and rural has delivered it to the winning side in seven of the eight general elections since its creation 34 years ago. (Labour took it, five years prematurely, in 1992.) No one seriously believes the 5,400 Tory majority is in play. Nonetheless, Nelson can explain a lot about British politics in 2017.

“This was a cracking town,” said John Bramwell (“John the Fish”), who has been purveying cod, haddock and non-stop banter to Nelson for 41 years, first on the market, now from one of the last white-run, independent shops in the town centre. Nelson had a football team that played fleetingly (1923-24) in the old Second Division, what is now called the Championship. And in 1929 the Lancashire League cricket team, flashing cash in a manner that baffled the national press, signed Learie Constantine, the most gifted and thrilling West Indian all-rounder of his generation.

“When he arrived, no one in Nelson had ever seen a black man close-to,” said Derek Metcalfe, the club’s historian. “People would cross the road when he passed by. But he grew into their affections. He was a highly intelligent man as well as a great player.” Constantine, after a post-cricket career in the law, Trinidadian politics and diplomacy, finished life in the House of Lords as Baron Constantine of Maraval and Nelson, Britain’s first black peer. In July 1943 the Imperial Hotel in Bloomsbury accepted his booking but not his presence, and he promptly sued. His victory at the high court the following year was an early landmark in the fight against racial discrimination.

It was the 1950s before Nelson would get used to seeing non-white faces again, when the mill owners, battling labour shortages and overseas competition, turned to Pakistan to find biddable and affordable workers. They found them in Gujrat District, which is not one of the more worldly places, even in the rural Punjab.

“The first group were young men who in many ways integrated better than they do now. There were no mosques. They went to the pubs with their workmates and knocked around with local women. Then they had to go to the airport to collect the intended wives they hadn’t met yet,” recalled Tony Greaves, the Liberal Democrat peer who is deputy leader of Pendle Borough Council.

The mills disappeared, gradually but inexorably, but the Pakistani community kept growing and has now reached its fourth generation. The young men do not normally spend time in pubs; indeed, in a town of 30,000 people, there are only two left, plus a couple on the outskirts. It is hard to imagine anywhere that size in Britain with fewer. There are, however, at least a dozen mosques. The 2011 census recorded 40 per cent of the population as Asian, but on market day in the town centre the proportion seems much higher. The most prominent retail outlets are two bazaars: the Nelson (the
old Poundstretcher) and the Suraj opposite (the old Woolworths). Few white faces are seen in either: the saris and hijabs are beautiful but of little interest. They are all imported to this textile town from south Asia.

The white people have retreated, either out of the town altogether or to the semis of Marsden, on the hill. In the visible life of Nelson, they are clearly a minority. Population change on this scale can be accommodated, if not always easily, in large cities. It is a different proposition in a small town that was once tight-knit and, despite its closeness to larger places such as Blackburn, Accrington and Burnley, largely self-contained.

Even after 60 years, hardly anything has melted in the pot. The early migrants were villagers who placed little value on education. Recent history has led Muslims all over the world to turn inwards, to their own religion and culture. This is being exacerbated by white flight and by the advent of religious free schools, a disaster for anywhere in search of cohesion. The old Nelsonians have turned away. “Nelson is not multiracial or multicultural. It is biracial and bicultural,” says Greaves. “I would love to tell you that I go round to Abbas’s house to have chicken jalfrezi and he comes to mine for steak pudding and chips,” says John the Fish. “It’s just not like that.”

Unemployment is high at 18 per cent; there is no shortage of taxis. Educational attainment is patchy. Teachers at the two high schools fear their best pupils will be creamed off further by the promised grammar-school boom.

The vicar of Nelson, Guy Jamieson, and at least some of the local imams do their utmost to make connections between the communities. In certain respects Nelson feels like similar-sized towns in Ulster: two communities separated by a gulf of non-communication. In other ways, this description is unfair. When Burnley, just four miles away, suffered riots in 2001, Nelson stayed quiet. I could sense no threat, no active tension, merely resigned indifference on both sides. “There’s a poverty of confidence,” Jamieson said. “They don’t know how to sit down and engage.”

***

A modern English town council, subordinate to Brussels, Westminster, county and district, is an improbable power base, but Sajid Ali seems to be making Nelson’s work. Its precept is only £330,000 a year but this is not capped, so it suits both district and town if Pendle offloads smaller assets: parks, play areas, community centres. It is a minimalist form of devolution, but harks back to the days when Nelson was a borough in its own right, and looks forward to an improbable future when our towns might again be allowed to take their own decisions as they do in more grown-up countries.

But the council votes on party lines, Labour’s 16 councillors trumping the Tories’ eight. “They won’t work with us,” Sajid says flatly. “They don’t run it fairly for the town itself,” says the Conservative Neil McGowan. “If we put something forward for Marsden, we are always outvoted. One council official told me they’d never come across a town like it.” In Tony Greaves’s words, “The
politics in Nelson were always sour.” In the 1930s it was known as Little Moscow.

When I first met Sajid, however, he was outside a polling station doing a stint as a teller and laughing merrily along with his blue-rosetted counterpart, Arshad Mahmood. Yet things were not quite as they seemed. Mahmood was part of a mass defection of Pakistani Lib Dems to the Conservatives which appears to have nothing to do with Brexit, extra taxes for the NHS or Maymania. What it does have to do with remains elusive even to local politicians: “clan politics” and “personal ambition” were mentioned. It may be even more complicated than that. “So you’ll be voting for Theresa May next month?” I asked Mahmood. “Oh, no, I like Jeremy Corbyn. Very good policies.”

Perhaps this helped Sajid maintain some enthusiasm for the bigger campaign ahead, though he was daunted by one fact: the general election coincides with Ramadan, and dawn-to-dusk fasting comes hard in these latitudes when it falls in summertime. Still, he was impressed by all the new members Corbyn had brought to Labour: “The way I see it is that each new member has five, ten, 15, 20 people they can sell the message to.”

This seemed a bit strange: it implied he thought politics in the rest of Britain worked as it did in these streets. He had boasted earlier that he knew everyone. “All over Nelson?” “Oh, no,” he had backtracked. “In the English community nobody knows their next-door neighbour.” Which was an exaggeration, but perhaps not much of one.

There were no posters along Sajid Ali’s streets – not one. The information about which house to choose was on the canvass return and, more significantly, in his head. Just once he got it wrong. A little white girl opened the door and then a tattooed, muscular figure in a singlet barrelled towards the door. He wasn’t aggressive, just brisk. “Naaw. I doan’t vote.” End of. It was a sudden reminder of the norms of modern British politics.

***

Another norm is that, at any local count, no one ever thinks much of the big picture. The rise and fall of prime ministers, earthquakes and landslides are no more than distant rumours, of surprisingly little interest to the principals; what matters is the here and now. Where did that ballot box come from? How big is the postal vote? Any chance of a recount? When the five seats for Pendle were counted the next day at the leisure centre in Colne, one stop further up the clanking branch line from Nelson, no one was talking about the Tory takeover at County Hall.

Here there was something for everyone: Mohammed Iqbal won, just as Sajid predicted. Azhar Ali took the other Nelson seat even more easily for Labour. Both results were greeted with more effusive male hugs than would be considered seemly in Berkshire. In Pendle Central the Tories knocked out the sitting Lib Dem, but – heroically, in their eyes – one of the Lib Dem candidates grabbed a seat in the rural division.

But the most interesting result came in the most trifling contest: a twinned by-election for two vacancies in Nelson Town Council’s lily-white ward of Marsden, so electors had two votes each. The seats were won by a Conservative married couple, the Pearson-Ashers, who got 426 and 401; the single BNP candidate had 359 votes, with one Labour candidate on 333 and the other on 190. The first of these was called Laura Blackburn; the second Ghulam Ullah. This suggests a good deal of vote-splitting that Labour might find rather unpalatable.

In fact, Marsden already has one far-right relic: Brian Parker, who sits on Pendle Borough Council, is the last survivor in the top two tiers of local government of the BNP mini-surge that took them to 55 council seats across the country by 2009. Of Parker, two opposing councillors told me: “He’s actually a very good ward councillor.”

Curiously, Ukip has made little impact in Nelson or in Pendle as a whole. So there is not much scope for the party to fulfil what appears to be its immediate destiny: as a way station for Labour’s historic core voters to catch their breath on the arduous journey into Theresa May’s arms. According to John the Fish, whose shop functions as a kind of confessional for white opinion, they may no longer need a stopover: “I’m getting plenty of people, staunch Labourites, telling me they can’t stand Corbyn.”

I asked him how many Pakistani regulars he had. He broke off from chopping hake and held up five fingers. On 8 June the fish-eaters of Marsden can be expected to rouse themselves more energetically than the Ramadan fasters across town.

***

Seedhill, the cricket ground graced by Constantine, is pretty Nelson rather than gritty Nelson, even though a chunk of it, including the old pavilion, was lopped off years ago to form an embankment carrying the M65. Upstairs in the pavilion is a wonderful picture of the great man, eyes ablaze, down on one knee for a full-blooded cover-drive. It would have made a better monument in the town centre than the 40-foot weaving shuttle that has dominated Market Street since 2011. I thought it was a torpedo; children think it’s a giant pencil.

The packed houses that watched Constantine lead Nelson to seven league titles in nine years have dwindled now: there were only a couple of dozen to watch his successors play Accrington recently. But it was a drab day with a chilly breeze and Burnley were at home to West Brom in the winter game down the road.

And generally the club thrives better than the town. Given the lack of hotels and pubs, the pavilion is much in demand for functions, and the team remains competitive. Nelson fielded four local Asians for the Accrington match, which suggests that, in one activity at least, integration is just about where it should be.

It seems unlikely that a similar situation would apply at the crown green bowls or the brass band, or any other of the long-standing recreations in Nelson (though small but growing numbers of Pakistanis are now taking allotments). The knee-jerk liberal reaction might be that this is somehow the fault of the white Nelsonians. I think this attitude is a grave oversimplification that has done much damage.

In one respect the incomers have re-created the old life of Nelson. In the hugger-mugger stone-built terraces, the neighbourliness, the power of extended families, the external patriarchy and the internal matriarchy, the vibrancy, the sense of communal struggle . . . that is exactly what this cotton town must have been like a century ago. 

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

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