The historians’ take on… The house price boom

With UK house prices reaching a record high in the summer, campaign groups are warning that new homes are becoming increasingly unaffordable for first-time buyers. And in his Autumn Statement on Wednesday the chancellor George Osborne announced a stamp duty overhaul. But why have Britons become so wedded to the idea of owning their own homes? Two historians offer their verdicts

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Dr Stuart Lowe on the decline of private rentals and council housing

The story of Britain’s housing market over the past 150 years has hinged around the shift from renting to home ownership. In the 19th century most people lived in privately rented houses, paying rent to small-scale landlords.

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Yet, as the number of households grew, so did the demand for housing, and that brought with it myriad problems: unaffordable rents, overcrowding and poor housing conditions for millions of families.

In an attempt to combat these issues, successive governments went about demolishing the worst Victorian slums. But, to fill the gap, there had to be a state subsidy, at least in the short term – but how? To answer this question, in the late 19th century central government turned to the newly organised local authorities. Their solution would set the template for modern public housing policy – with state sponsored ‘council housing’ largely replacing private landlords.

The First World War strengthened this idea of state-led change – away from the Victorian laissez-faire economy. In fact, as the number of households grew, the postwar government planned a temporary programme of council housing much bigger than previously envisaged – so-called ‘homes fit for heroes’. Meanwhile, returns for private landlords were poor and rents had been frozen during the war. People who lived in the early council housing of the 1920s and 30s were socially mixed – including, for example, teachers.

Yet, the poorest working-class families were still unable to afford the rent – even though it was subsidised – and so found themselves condemned to grotty slums at the bottom end of the market.

The end of the Second World War saw another house-building push – partly to replace bomb damage but mainly because the number of households began to surge once more.

Nye Bevan, the Labour housing minister, argued for a state-led solution so that private developers would not profit from postwar shortages. This set the trend for the 1950s, 60s and 70s, when governments of all colours built council houses in their thousands, as private landlords failed to invest. Soon, nearly a third of the population lived in council housing.

Home ownership was enjoying a postwar boom too. Owner occupation had taken off in the 1930s, seen a revival in the 1950s – with the support of both Conservative and Labour governments – and, by the 1970s, accounted for most households.

Yet home ownership was to receive its greatest boost in the 1980s when Margaret Thatcher began to sell off council stock through her ‘Right to Buy’ campaign. While wealthier tenants were able to purchase their homes, the less well-off were left in so-called ‘social housing’ – which offered a very different social mix and purpose from the state housing that had preceded it.

Then, in the 1990s, the number of new homes being built plummeted – the result
of stringent planning controls and private companies’ reluctance to build unless the market signals were right.

For Britons today searching for somewhere to live, the events of the past 30 years have proved the perfect storm – and, with fewer new houses being built now than at any time since the 1920s, the situation may get worse before it gets better. Housing will become a much bigger issue as the crisis deepens and the shortages become ever-more marked.

Dr Stuart Lowe is senior lecturer in social policy at the University of York

Philippa Lewis on our fixation with owning a house with a garden

Why are we so obsessed with buying our own slice of our ‘green and pleasant land’? From pre-industrial times, as soon as anyone made any money they built themselves a country house. That was where they concentrated their wealth, that was how they showed off. There were lots of books published about how your house should look – and how other people’s houses looked.

In 1750 Samuel Johnson described being at home as: “Those soft intervals of unbended amusement in which a man shrinks to his natural dimensions and throws aside the ornaments and disguises which he feels in privacy to be useless encumbrances… To be happy at home is the ultimate result of all ambition, the end to which every enterprise and labour tends and of which every desire prompts the persecution.”

As cities grew, our main urban type was the terrace house. Initially, they were hardly ever owned. Early leaseholds were about 40 years on those terraces. People moved around quite a bit, and weren’t attached to houses as people are now. It was quite simple for Britons to ‘take lodgings’ in different places – and there was certainly no stigma attached to the practice.

But what was seen as a distinctively British love of the fixed home grew steadily. By 1904 the German writer Hermann Muthesius was spot-on in writing about how the English “forgo the theatre, concerts, dinner parties and much else… for the sake of breathing simple fresh country air and enjoying their gardens”.

Not everywhere in Britain was the same. Many Scots lived in flats, while the English thought them ‘unhomelike’. Why was that? Model housing like the Peabody buildings in London were called “barracks for the working classes”. They looked huge. So when they started building flats for the middle classes, people were really nervous. They were also anxious about living on one floor with servants – where there were no clear distinctions between ‘upstairs’ and ‘downstairs’. The concrete tower blocks built in the 1950s and 60s simply reinforced the prejudice against flats.

House ownership – as opposed to renting – grew rapidly between the two world wars, due partly to the availability of mortgages at affordable rates. Social rivalry developed between council estates and private housing; the English more than anyone else judged themselves by their houses. 

People used ornamentation to define their houses and aspirational social status – private estates would have gabling, for example, while council estates did not. And when council housing was sold off in the 1980s owners were very keen to distinguish their houses with new ornamentation.

The rapidly expanding suburbs proved attractive to buyers too. Cultural critics such as John Ruskin hade been coruscatingly rude about them, suggesting everyone in them was stupid. But they are places that endless people have settled for – lured by the idea of fresh air, a bit of garden, a better place to bring up children.

This love of ‘a home of your own’, this platform for expressing our personal taste has driven millions of us to buy our own homes. Meanwhile, renting – whether privately or in council housing – has become less possible and less popular. 

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Philippa Lewis is author of Everyman’s Castle: The Story of Our Cottages, Country Houses, Terraces, Flats, Semis and Bungalows (Frances Lincoln, 2014).