Home ownership in the UK will slump to its lowest level since the mid-1980s over the next decade, leading to an “unprecedented crisis” in the housing market, the National Housing Federation (NHF) has warned.
Now leave aside the fact that this report comes from the builders who are looking for handouts.
The actual result is quite probably desirable. It is possible for home ownership rates to be too high.
It\’s long been known that a level of home ownership which is \”too high\” (defining \”too high\” is a bit tougher) increases the general unemployment rate.
This is because jobs tend not to pop up just where people already live. So some people need to move to where the jobs are. It isn\’t the easiest thing in the world to sell up, buy again and move. It\’s certainly more difficult to do that than it is to move out of one rental and into another.
So, labour force mobility is constrained by having too high a level of house ownership. Constraints on labour mobility lead to higher unemployment rates. More of the population living in rentals should, ceteris paribus, lead to greater potential (at least) labour mobility and thus a lower unemployment rate.
At this point we get the inevitable comment that sure, so we should build more social housing, right? And in a pure world, perhaps. Except, moving within one local housing catchment area is pretty tough, certainly more difficult than buying and selling. Moving across such boundaries is near impossible: takes years at the very least.
So whatever problems social housing fixes this isn\’t one of them.