Tue May 31st, 2011 at 04:34:20 PM EST
Following on from a story posted in Salon today, I felt obliged to write a few comments that have grown into a diary (as requested by ceebs)
Indpendent - Britain to become a nation of renters
A generation of young British adults is close to giving up hope of ever owning their own place to live. A startling new survey reveals that while the great majority of young Britons from "Generation Rent" would like to become homeowners, most believe they will be unable to raise the mortgage they require to get on to the property ladder.
A combination of continually rising house prices and pessimism about the future is threatening to send into reverse the explosion in home ownership stimulated by Margaret Thatcher 30 years ago, making Britain more like Europe, where living in rented property is the norm.
The problem is that the market has most definitely not been "supplying" affordable homes in the British market for decades. It has, however, been delivering superb profits for home-owners, builders and, of course, the estate agents who parasitise the process. Effectively this is a transfer from the young and (relatively) poor to the wealthier old. A policy that might have been defensible if perpetual, but it was never designed for that.
As I have discussed previously, the UK market is distorted by the reality that all of the demand is in the south east of England, an area which already contains over 1/3 of the population. The area is too crowded and each year that passes with ever decreasing employment elsewhere makes the problem worse.
A problem that is exacerbated by planning laws which mean that any land that might have planning permission to build is extremely expensive and snapped up by consortia who are determined to extract maximum return. And they do that by preferring to build houses that serve a niche market of wealthy people and ignoring the lower end of affordability for the simple and obvious reason that there isn't as much profit in it.
So the less wealthy unhoused are pushed into a rented sector where demand far exceeds supply and the rents expected have become ridiculous. Typical rents for a 2 bedroom flat within commuting distance of London in a half decent area can go as high as £1000 a month. A four bedroom house two doors away from me is rented at £2500 a month. Considering that the mortgage on such a property is generally 1/3 - 1/2 of the cost of renting, you can understand the traditional push for home ownership.
Solutions ? Build more houses of course, but equally employment must be moved away from the South East to ease the pressure. However that requires govt incentives - a recognition that the market has failed utterly to serve the needs and requirements of the population.
Is such a government likely ? Sadly there isn't a chance. Labour are as much prisoners of the market as the Tories, their only difference is to believe in a bigger mop to clear up the mess it creates. The idea that the mess can be prevented is no longer encompassed by their impoverished and cowed imagination.