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Margaret Thatcher’s ‘property-owning democracy’ project drove a mass sell-off of social housing and the growth of private ownership. Now, after more than 40 years of soaring prices and growing inequality, is it time to change course?

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Property: natural and imprescriptible human right, foundation of freedom, engine of wealth, maker of peace and law. The concept that runs through western democracy like steel through reinforced concrete, which wrote the code for the formation of the United States and underwrote the expansion of great cities, which has been embraced by developing economies as the means to prosperity and private fulfilment, and without which neither industrial nor post-industrial society, nor uncountable cultural, social and economic benefits that follow, would exist.

Property spirals out of control

A good craved by individuals that converts personal effort into permanent achievement. A foundation for a good home, for the shelter and setting of your life and the repository of your dreams. Property, which also has a way of making the world go mad.

I have lived, my whole adult life, through the project known as the property-owning democracy. It was based on the idea that property would make you a better, happier and richer person and responded to the simple, reasonable and powerful desire of very many people to own their home. The property-owning democracy would set you free. For Margaret Thatcher, for whom it was a defining and prodigiously successful concept, it was a “crusade to enfranchise the many in the economic life of the nation”.

So she sold off council houses to their tenants and deregulated and liberalised mortgage markets. From 1980 to 1990 rates of home ownership rose from 55% to 67% of households. At the same time prices rose, almost trebling during her 11-year term. In general Thatcher’s government prided itself on fighting inflation, inflicting heavy costs on employment in an attempt to bring the annual rate down. 

But with property it was different. Inflation, when it came to homes, was to be celebrated. It was seen as a sign of economic virility, and it made those who had bought feel good. Succeeding governments followed her lead in encouraging both ownership and rising prices. Values more than trebled in the Blair era.

Rent hikes in London

Eventually the inflationary part of the project defeated the ideal of widening enfranchisement. Newcomers to the market just couldn’t afford it, and from the mid-00s rates of ownership started to fall. At the same time the stock of council housing declined. The symptoms of what is now called the “housing crisis” became plainer and plainer – fewer and fewer young people buying, more living with their parents or in rented homes whose prices continue to rise. Private rents are now at their highest level ever, up 20% in some regions over the previous 12 months.

My name is Rowan Moore and I am a millionaire. That is, I own property assets with a value over £1m sterling. This is not because my work as an architecture critic is fabulously lucrative, or because I am a financial genius, or because I inherited great wealth, but because I have lived in a particular time and place in which the ownership of a home has been a ticket to an unearned and untaxed fortune.

I am lucky. I may have made some decisions I might consider smart, and have made some bets that paid off, and weathered some financial squalls, and worked hard, but most of all I am lucky. There are other people as hardworking as me who do not have so many zeros on their capital – because they are younger, for example, or live in a different city, or for some other reason did not have the opportunity to get on the property escalator at an advantageous time.

Saving for the future

So what do I do with my luck? Do I give everything away to others less fortunate? Mostly I do not. I hang on to my assets. I think they might be helpful for my children’s security, and for their own prospects of getting a home in an overpriced market. I’d like to store up some cash to pay for my potential care needs in old age, in the knowledge that in this respect I can’t hope for much help from the state. It seems a little futile unilaterally to renounce my wealth when others like me do not. And, frankly, when you have stuff it’s difficult to give it up.

But I don’t feel that I deserve it all. I know that there are so many others who are struggling to achieve a sliver of what I have. It is impossible for me not to want to help my children, and there are philosophers who argue that impulses like mine are positively moral, but I know that such help perpetuates a property-based division of classes. I would like to be less rich. I would like my home to be worth less. I would welcome house price deflation, so long as prices fell roughly equally, and not disproportionately on my own property. It would also be important that other owners less well placed than me – people who have only recently bought, for example, and can only just afford their mortgage – aren’t collateral damage in any property crash.

Highs and lows of housing

I would welcome taxation of my unearned profits, but it would help if I could trust that the taxes raised from me and my like would be well spent, in particular on addressing housing need elsewhere. If I could believe that, whatever happened, I and my children could be sure of a decent place to live and adequate health and social care I would have less desire to hoard. Until this new arrangement arrives, however, I expect I will act much like other people who own: striving to protect my assets, aiming to get a high price when selling and a low one when buying.

Such a change in public policy would require a shift in what has been the dominating philosophy of government since the 1980s, that private property is supreme, that – in the tradition going back to Locke – it is “natural”, almost divine. It remains a hugely effective, beneficial and desirable way to hold and manage land, but it is not the only one. Its gifts are prone to disproportion. They reward luck and sometimes force. Property can fortify the proceeds of abuse and entrench divisions between those who have it and those who do not.

Thomas Jefferson said that land should belong ‘in usufruct to the living’, that what matters most is not eternal proprietorship, but the ability to benefit from it during your life. Property is social as well as private. The value of my home is built on public and private investment, and on all the striving of millions who make London a successful city. It is also based on the future prices to be paid – barring a huge crash in values – by younger and newer buyers. If they have to pay much more than I did for the same space, at least part of my fortune is at their expense – given which, society has a case for reclaiming something from me.

Private property is a means to ends – shelter, security, freedom, wealth, happiness. It is often effective and powerful, but it is the ends that matter most. Where property fails to do its job, it has to be challenged, reformed and where necessary augmented with more useful alternatives. The long experiment with a “property owning democracy” has had its successes, but is also showing dangerous cracks. The task now is not to sweep away private property, but to show how its beautiful promises might be fulfilled.

This article first appeared in the Guardian.

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