Why Do We Still Fetishise Homeownership?

On Monday, Boris Johnson floated a bold new plan: giving housing associations tenants the chance to buy their houses. Under the plan, some 2.5 million tenants would be allowed to put housing benefits towards mortgages, using public funds to create private property.

The Conservatives have long held up homeownership as the golden standard of British life. But it isn’t just Tory die-hards who fetishise it. Despite the steep decline in homeownership in the past quarter-century – half of 25-34-year-olds owned their own homes in 1989, while only a quarter do today – it remains the default desire of the vast majority of generation rent. Why?

Of course, Johnson’s plan is just ‘right to buy’ 2.0. The idea of a ‘property-owning democracy’ has become synonymous with Margaret Thatcher – but it’s been a part of Tory rhetoric since the early 20th century. The Scottish Unionist Noel Skelton coined the term, believing that widespread property ownership would make Britain a more stable society and dampen socialism’s appeal amongst working-class voters. Skelton’s “constructive conservatism” channelled late 19th-century ideas of “constructive unionism” and “killing home rule with kindness” – a British government tactic whereby state-issued mortgages were used to convert troublesome Irish tenants into pro-British property-owners.

Like prime ministers Anthony Eden and Alec Douglas-Home before her, Thatcher adopted Skelton’s ideas with zeal. She personally claimed to dislike the word privatisation, calling it “a dreadful bit of jargon to inflict on the language of Shakespeare”. Nonetheless, she relished “how much hope it offers, and how great [are] the benefits it brings” – namely the opportunity to “give power and responsibility back to people”, to “restore to individuals and families the sense and feeling of independence”, “the freedom and the dignity which come from having something they can call their own”. Far more avidly than her predecessors, Thatcher stressed the moral dimensions of privatisation, believing (according to the historian Eric Evans) it would give birth to the “generation of risk-taking, wealth-enhancing popular capitalists”. Where owning property might previously have been the economically rational thing to do, now it was a moral duty.

Housing was core to her mission: in her 1976 policy document ‘The Right Approach’, she made one of her first attempts to outline a new Thatcherite doctrine that would distinguish itself from that of the more moderate, conciliatory Tory ‘Wets’. The document targeted “the traditional socialist vendetta against the private sector”, placing particular emphasis on housing. “Most people want to become homeowners”, it asserted – and that was no bad thing. The rest of the party rallied around her. The following year, the hard-right Selsdon Group of the Conservative party produced the Ridley Report, which promised to make “every man a capitalist” by extending and popularising shared-ownership. Thatcher’s 1979 Conservative manifesto combined the thinking of these two documents, and contained a pledge that would transform British society: to help people own their own council homes.

Thatcher certainly made good on her manifesto pledge. In just her first year in office, 55,000 council houses were sold to their occupants, peaking at 204,000 in 1982-83. Rents in council houses were almost doubled to encourage tenants to buy. In the decade after 1979, private ownership (as opposed to rental or public council tenancies) increased from 55 to 63% of Britain’s housing stock – one of the highest figures in the industrialised world. John Boughton, a historian of council housing, has described those who bought their council homes as Thatcherism’s “fifth column”.

The scale of privatisation that took place during Thatcher’s 12 years in power is staggering. Writer James Meek provides an itemised list of how much of the British economy was state-owned prior to 1979, much of this the legacy of Clement Attlee’s Labour government and the ‘Keynesian consensus’ that had defined post-war British politics:

The health service, most schools, the armed forces, prisons, roads, bridges and streets, water, sewers, the National Grid, power stations, the phone and postal system, gas supply, coal mines, the railways, refuse collections, the airports, many of the ports, local and long-distance buses, freight lorries, nuclear fuel reprocessing, air traffic control, much of the car, ship and aircraft-building industry, most of the steel factories, British Airways, oil companies, cable and wireless, the aircraft engine makers Rolls-Royce, the arms makers Royal Ordnance, the ferry company Sealink, the Trustee Savings Bank, Girobank, technology companies Ferranti and Inmos, medical technology firm Amersham International and many others.

By the time Thatcher left office in 1990, 60% of all this had been privatised.

By far Thatcher’s largest privatisation was of housing: £22bn of state assets had been privatised by 1997. The geographer Brett Christophers estimates that 2 million hectares of public land – 10% of the entire British landmass – was privatised from 1979 onwards, worth £400bn. And for many people, the sale of council housing was the most visible manifestation of this mass privatisation. To encourage their purchase, and contradicting Thatcher’s own free-marketeer rhetoric, council houses were often sold at below-market rates (sometimes at up to a 50% discount). Flats, less conducive to the nuclear family life Thatcher lauded, were particularly slow to sell; discounts of 44% to 70% were offered on them in the mid-80s. Thatcher was willing to be ideologically flexible in the short term if it served her long-term goal of full privatisation (similarly when Thatcher privatised British Telecom in 1984, and she forced the price of shares artificially low to allow new shareholders to buy in).

This state interventionism would have disastrous consequences for the ordinary British people Thatcher claimed to help with her privatisation drive. The low share prices of newly privatised companies quickly became a temptation to sell once the market price rose. Most shares quickly found their way back to the large financial institutions. The long-term beneficiaries of privatisation were pension-fund managers. Something very similar was true of housing: a high percentage of newly minted owner-occupiers soon sold their homes. In London, over a third of all previously-public housing is now being rented privately; in some areas, that figure is above 50%.

As with so much else about Thatcherism, the privatisation project continued under Tony Blair. Rather than replacing sold-off council houses, Blair and Brown oversaw a hugely increased use of housing benefits, papering over the lack of affordable homes. First introduced in 1982 and intended only as a temporary measure, by the end of the Thatcher years about £5bn was being spent annually on housing benefits. It now hovers around £20bn – effectively a cash subsidy to private landlords.

With council housing stocks dwindling, their ability to exert downward pressure on house prices has also waned. The average cost of a house in the UK is now close to nine times the median annual income – a doubling in real prices since the end of the seventies. In London, the average monthly rent is £1,750, over £1,000 more than in the rest of the UK. In 1979, the average weekly rent on a council house was £6.40 (approximately £25 in today’s money).

The result of the council housing sell-off has not been the liberatory property-owning democracy promised by Thatcher, but a nation of market-bound renters. And yet, the Thatcherite ideal of homeownership still reigns supreme. The potential reasons for this are manifold. One may be the inextricability of property-ownership from established ideas about citizenship, as well as deep-rooted gender and racial norms. “The family is the citadel of individual freedom,” Ian Gilmour, a Tory MP who served in Thatcher’s government, told the Commons. “But that citadel needs its moat of private property.”

Another, more recent explanation may be the hollowing out of the welfare state, or the substitution of pensions for housing. Or maybe we’ve just bought into Thatcher’s idea that owning a home is a moral imperative. Either way, it seems that for many of us – including those who nominally oppose Thatcher’s property-owning democracy – it remains the ultimate ideal, even if it’s one we’ll never realise.