I bought my first flat in Notting Hill in 1969 for £11,500. I daren’t think what it’s worth today, but it will be more like £1.5m.
So what, I hear you cry. Well it makes an important point about the British obsession with home ownership. In those days, you bought your home if you could possibly afford it and, what is more, you mortgaged yourself to the hilt because inflation – a word people under 30 hardly recognise – was running in high single if not double digits.
So every year your home went up in price (not value mind, but price) and your salary would probably grow at least at the rate of inflation, but your mortgage would be the same amount in cash and therefore a smaller proportion of your net income.
I recall in the early 1980s buying a house for £220,000 and selling it 18 months later for £440,000. But I wasn’t actually any better off because everywhere I wanted to move to had gone up at the same rate. I suppose if I had retired at that time I would have been able to move to a cheaper area and my house would have become my pension.
The important point is that those of us who have millennials as children rather than as secretaries of state (no offence Mr Jenrick) know why owning your own home was the ultimate political sacred cow.
One of Thatcher’s most enduring legacies was allowing council tenants to buy their council property. Sure, she should have ensured that for each sale the local authority kept enough money to build another home for those who couldn’t afford to buy, but that one bold move created a generation of working-class Tories who remained her most loyal supporters. It gave them a stake in our property-owning democracy.
But if you bought a London flat five years ago, you might well find that it is still worth no more and on occasions slightly less than you paid for it. Inflation has almost come to be ignored because, like interest rates, it has fallen to levels of growth that are almost negligible.
What advantage have you had from ownership? You paid stamp duty on the way in and you’ve paid as much to a mortgage lender as you would pay to a landlord. It’s nothing like as obvious that you made the right choice and sadly even forgetting the monthly outgoings you’re also stuck with what you bought and have to find a buyer before you can move.
The world is changing
With a big world out there, maybe you and your partner prefer to use the years before the children arrive to travel the world. It’s so much easier to do that now and why not? You can work from a laptop wherever you can get a decent signal.
A few years ago, one of my sons took a year off to go to Australia. He kept his London job by becoming their night man. If an urgent job arrived and the client demanded an overnight response, they just sent it to him and he woke up, did the job in Melbourne and sent it back in time for London breakfast.
Inflation is ignored because it has fallen to levels of growth that are almost negligible
It’s understandable that the Tories want to be the party of home ownership. Their polling will tell them it’s popular, as I’m sure it is. Nor am I suggesting home ownership isn’t most people’s long-term aspiration. But if policymakers in MHCLG don’t understand how fast the world is changing, that we work in different ways these days and live in different ways too, then they’ll be missing a big trick and doing us all a great disservice. We need a use-classes order that recognises co-working and co-living as what is happening in the real world.
The days when planners and developers were forced to treat it as sui generis are surely long gone.
Steve Norris is chairman of Soho Estates and This Land