X

Create an account to continue reading.

Registered readers have access to our blogs and a limited number of magazine articles
For unlimited access to The Spectator, subscribe below

Registered readers have access to our blogs and a limited number of magazine articles

Sign in to continue

Already have an account?

What's my subscriber number?

Subscribe now from £1 a week

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
 
View subscription offers

Already a subscriber?

or

Subscribe now for unlimited access

ALL FROM JUST £1 A WEEK

View subscription offers

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Login

Don't have an account? Sign up
X

Subscription expired

Your subscription has expired. Please go to My Account to renew it or view subscription offers.

X

Forgot Password

Please check your email

If the email address you entered is associated with a web account on our system, you will receive an email from us with instructions for resetting your password.

If you don't receive this email, please check your junk mail folder.

X

It's time to subscribe.

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access – from just £1 a week

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
X

Sign up

What's my subscriber number? Already have an account?

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Your subscriber number is the 8 digit number printed above your name on the address sheet sent with your magazine each week. If you receive it, you’ll also find your subscriber number at the top of our weekly highlights email.

Entering your subscriber number will enable full access to all magazine articles on the site.

If you cannot find your subscriber number then please contact us on customerhelp@subscriptions.spectator.co.uk or call 0330 333 0050. If you’ve only just subscribed, you may not yet have been issued with a subscriber number. In this case you can use the temporary web ID number, included in your email order confirmation.

You can create an account in the meantime and link your subscription at a later time. Simply visit the My Account page, enter your subscriber number in the relevant field and click 'submit changes'.

If you have any difficulties creating an account or logging in please take a look at our FAQs page.

Coffee House

If Brexit solves the housing crisis, bring it on

23 May 2016

10:30 PM

23 May 2016

10:30 PM

It is, at times, unclear that George Osborne is aware that the under-30s are voting in this EU referendum. When he talks about house prices plummeting post-Brexit, he talks as if this will strike fear into everyone’s hearts. For older people seeking to downsize, this might be true – but for almost everyone else, it’s not. And when I hear the In side arguing that we should all be terrified of Brexit because it will cause house prices to fall, I can’t help but wonder if this is the best single reason to vote ‘out’. For most people my age, one of the worst changes in Britain has been the way property prices have spiraled out of control – indeed, how the economic system is conspiring against my generation. If Brexit can change that, then we might be interested.

It’s not just Osborne, either. Mark Carney, the governor of the Bank of England, has also made the point, saying that Brexit could have a ‘material economic impact’ meaning falling house prices and rising interest rates. Heaven forbid! Not only would house prices be more affordable, we might get interest on our savings as we build up a deposit. The ratings agency Moody’s has said that first-time homebuyers would benefit from a vote to leave the EU, because a fall in house prices would make it more affordable for people trying to get on the property ladder for the first time. Christine Lagarde, the managing director of the IMF, also warned recently that a vote to leave the EU could precipitate a stock market crash and steep fall in house prices. For those in their twenties, who tend not to have many shares, this sounds like a pretty good trade-off.

I live in London, the world capital of crazy house prices. A two-bedroom former council house in Hackney costs around £600,000; the average salary here is around £30,000. But in Manchester, Bristol and Edinburgh the stories are similar: huge house prices, at dizzying multiples of your salary. When David Cameron became Tory leader, house prices were much lower than they are now. And while there was froth in the 1980s, Britain has never seen anything resembling the asset boom that exists today. The basic British dream – education, job, house, life – has been smashed for my generation.

A few years ago,  a piece of graffiti existed in east London that summed it up: ‘Sorry, the lifestyle you ordered is out of stock.’ And that’s what it feels like for my age group. You can work hard at school, get a good degree, even land a job paying a decent wage. But nowadays this isn’t enough to make the next step: buy a house. A new divide is being built: between those who have to rely on their earnings (and get nowhere) and those whose family have benefited from the asset boom, and can get on the property ladder. Even those who do have family help find this system unjust.

For years, we’ve been told that this was some kind of economic blip: a freak event, an aftershock of the crash. But this ‘blip’ has been going along for some time. This hideous economic system, where there’s no point in saving and no hope of buying, looks like the new normal. This is the zero era, the consequences of having interest rates nailed to the floor. At first, it was seen as an emergency. Now, the Chancellor is warning that if we vote for Brexit then interest rates will rise. It’s like those inside of the gated wall of property ownership want to keep their wealth (and cheap borrowing) for as long as possible.

Few young people talk about house prices these days; instead, we bang on about rental rates. But if you want proof that we do care about housing, and can be rallied when needed, take this example. Vicky Spratt, a journalist of a similar age to me who works for The Debrief, a website for young women, has begun a campaign to ‘make renting fair’. Her petition to ban letting agency fees has so far received over a quarter of a million signatures. I’d be willing to bet a lot that a large proportion of the people who signed would be delighted to see house prices fall. 

Perhaps they wouldn’t all traditionally support Brexit – but desperate times call for desperate measures. If you can’t ever see yourself buying a property, and the Chancellor tells you that your vote in the EU referendum may give you the opportunity to change that, it may seem tempting. Vote leave, and solve the housing crisis. Vote leave, and finally change the economic system that has kept you outside. Would you blame us for voting for drastic change?

Even first-time buyers may hope for a crash. If you’ve saved enough to buy a £200,000 property, and your next move is a £400,000 one, then you’d have to borrow the difference. That’s real money. But if the market falls by a quarter, then so does the sum you have to borrow. It’s within the interests of anyone trading up (or expecting to) that prices fall. And the interest rates? Even Osborne’s worst-case scenario shows the Bank of England refusing to raise rates, because (as most economists agree) central banks tend not to do so during times of economic distress. And even if banks do raise rates on their own volition, the Treasury admits they’d be unlikely to do so by more than 1 per cent. So: cheaper houses, bargain mortgages. What’s not to like?

Of course the reason why Osborne and Lagarde think talking about house prices is a good idea is because they are relying on an ageing population for whom a house price crash wouldn’t be good news. If older people famously get out to vote, younger people famously don’t. And so far, the EU referendum debate has been characterised by the same dreary middle-aged men sniping at each other non-stop – it’s hardly going to get younger voters excited.

But it is about time that younger people were brought into the discussion, and I think Osborne has, inadvertently, hit upon something that could engage us. Having found the debate fairly uninspiring so far, I have yet to decide which way I will vote. But if Brexit would end the way the housing market is rigged against the young, then it may just be the only chance my generation will get to level things out. 


le

Should Britain Leave the EU?

The Spectator returns with a second Brexit debate on Tuesday 14 June at Westminster’s Emmanuel Centre. As the referendum date looms closer, the polls are neck and neck and tensions are running high. As the campaign enters its final stages, join Andrew Neil for a debate with leading voices from the Leave and Remain camps. Hear from speakers including Suzanne Evans of Ukip, Conservative MEP Daniel Hannan and former Conservative foreign secretary, Sir Malcolm Rifkind. For more information and to book tickets, click here


Show comments
Close