Who needs mortgages anyway?
All this brouhaha about getting banks loaning to homebuyers, especially the banks like Northern Rock that have been bailed out by the government… Let’s step back and ask ourselves if owning your own home is really all that it’s cracked up to be. I’m coming to think that it’s not.
I’m not talking about the micro- or macro-economics of this. I’m not an economist and I invite my economist friends to tell me the financial pros and cons of renting all your life. But from a social point of view, from a community point of view, it’s interesting to look at which makes for more resilient, cohesive societies – renting or owning.
Napoleon got it only half-right. A nation of shopkeepers we may be, but we are perhaps first and foremost a nation of homeowners. We’re collectively obsessed with property. But it was not ever thus. Until 1953 only 32% of us owned the houses we lived in. That rose steadily throughout the 2oth Century until it hit a peak of 75% in 1981, the dawn of the Thatcher era. The absolute number has been in gradual decline for the last few years.
I’m too young to remember it of course but the Right To Buy was a large plank of the Thatcher project. Asides the financial benefits of owning a long-term investment like a house there were supposed to be all sorts of social benefits, everything from more stable family lives, to greater educational attainment, to more civic pride in our neighbourhoods.
But does owning your own home really make you a better citizen? Perhaps unsurprisingly the American interest group Homeownership Alliance reckons that the evidence is overwhelming. Homeowners in the US, they say, are more likely to vote or be active in civil society and to be more satisfied with their lives overall than non-owners, even after controlling for socioeconomic status.
But hold on. If home ownership is all its cracked up to be, and we’re most of us home owners, then why are we so worried about declining social capital in the UK during precisely this golden era of mortgage lending? And are we really saying that countries with much lower ownership rates such as France (54%), Germany (43%) and Denmark (53%) are blighted with communities in terminal decline by comparison?
When you sit down and think about it, it’s unrealistic that all of us can own our own homes, and it becomes even more unrealistic as this world of ours becomes more crowded and polluted. Nor do simple correllations between home ownership and desirable social traits mean that owning a house makes us all great neighbours – when it comes to policy, you’ve always got to ask “so what?”. What are the processes behind that data? Maybe family stability, high educational attainment and so on are conducive to home ownership, regardless of background, rather than the other way round?
Housing Associations and housing cooperatives have been proved to be great banks of social capital and economic development in our communities. The Darnhill Estate in Manchester is one example of this. When this estate was transferred to the Guinness Trust in 1999 it had to find a way of engaging local people in managing and regenerating the area. The residents had “consultation fatigue” – they’d all been interviewed bazillions of times by the council, the trust or a third party.
In the end, local people were recruited to carry out the social audit in a method piloted in Africa in which they were involved in creating the research tools. The legacy of this was considerable; many gained NVQs through this, some stood for elected positions and marginalised people formed connections with others on the estate. Other forms of ownership are not necessarily inferior to owner-occupation. In fact, they can provide platforms for communities to think about themselves and their futures.
I lived in huge Scottish tenements for years and I found it impossible to get away from my neighbours. Our shared close provided us with endless little shared projects (all of them involving junkies in the bike shed and broken front doors). I don’t think that had anything to do with whether we owned our own homes, but came from a variety of factors including the design of the close and a culture of living on top of one another.
Being an engaged, active citizen is about so much more than owning your own bricks and mortar and many of the things its supposed to provide – stability, civic engagement and so-on – are about how we live together. From a social point of view at least, maybe it’s time we moved on from this collective obsession with home ownership.