Generation Rent, Living at Home and the Grey Vote

by George Hatjoullis

There is a great deal of fuss being made about something called ‘Generation Rent’. This, it seems, represents a whole generation ‘doomed’ to live in rented accommodation and never own their own home. This category is closely associated with the ‘thirty something and living at home’ category. Let us abbreviate to GR and LAT respectively. The phenomena are deemed both new and undesirable. It is not new.

I grew up in a large family living in a not quite large enough Victorian terrace in North London. At any point the house, owned by my father, accommodated us kids, married siblings, cousins and various transients. Adjacent properties were split into bedsits and flats and were just as densely occupied but with people who were strangers. At least we were all related!. Indeed living as one big extended family and renting was the norm in my childhood. Then came the great inflation of the 1960s and 1970s and home ownership exploded. At the same time many council houses were built offering affordable accommodation. Now we think homeownership and affordable housing as a basic right for all.

The problem with renting is not paying rent but that the quality of available accommodation is limited and not very good. This was always true. Home ownership is just renting to yourself ( see my blog Personal Finance 8: Residential Property). It has tax advantages but also requires a leveraged investment in a specific property in a specific area. The investment may or may not be a good idea. It has been in the last 5 years but anyone involved in property in the UK between 1988-1994 might have a different perspective as might someone who owns Spain  or Cyprus property. Indeed, if, as I have repeatedly suggested in 2014 blogs, the housing bubble has burst, it will quickly become a catastrophe. It would be great if we could separate the housing investment from the home.

The main advantage of home ownership, apart from tax on the investment, is control over the quality of the home. If standards for rental properties could be effectively regulated and policed, this advantage would diminish. The other oft quoted advantage is security. This too could be improved for tenants by more regulation. However, overkill might reduce the supply of rental accommodation. Security is not total in home ownership. If you do not keep up payments you could lose your home. For many people this involves their main asset as the net equity of the home may be their net worth. The disadvantage of home ownership is specific risk in the investment and lack of liquidity. This can lead to locational immobility. You cannot just get on your bike and find a job. It has to be near enough to your home to commute. This immobility can lead to blighted areas and regional unemployment. There is much to be said for renting if the accommodation is available. The solution to the housing crisis is not just to build more houses but to provide more affordable rental accommodation.

One of the problems with council housing is that many turned into ghettos full of problem members of society. This was partly a design fault and, later, a policy. Neither mistake need be repeated. It is possible for the state to provide or sponsor affordable housing around the country of a high standard and offer reasonable if not unconditional security. No political party seems to be pursuing this with any vigour and movements such as Generation Rent might want to address the problem from this perspective.

Generation Rent is being identified as a political movement. However, many are not renting but living at home or in other ways depending upon parental units (my son’s term for my wife and me). Generation Rent includes these parents! There is a de facto resurrection of the extended family, much like the one in which I grew up. I have two grown sons living at home. This is not quite the density of my father’s Victorian terrace but many similar issues arise. Our collective political perspectives are tending to merge and focus on common problems and issues. It is incorrect to regard me, a retired homeowner, as a separate political constituency from my Generation Rent sons. I am as much concerned about their predicament as they and my own voting intentions may not be what is assumed. Take heed all political parties.

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