Econ Insights: Is housing a political issue?
In this series, we look at interesting data sets to uncover hidden insights.
Analysis of the Ipsos Mori issues index shows that the percentage of people citing housing as a major issue facing Britain almost tripled between 2010 and 2017 rising from 6% to 17%.
This suggests that the housing 'crisis' is starting to gain political salience although solving it (i.e. reducing housing costs) will remain politically challenging due to home owners forming the political majority.
The political economy of housing over the past 30 years has been broadly characterised by rising home ownership and increasing house prices. Although home ownership peaked in the 2000's, 63% of households still own their own home and policies which reduce house prices remain politically toxic. In many cases a house is not only a household's greatest financial asset it also provides an important source of financial security in older age. As a result housing policies tend to focus on demand-side subsidies such as Help-to-Buy which do little to address the underlying structural forces driving rising house prices namely, debt-fuelled asset price inflation . The desire to maintain house prices is perfectly epitomised by the fact that 'affordability' is defined in relation to house prices rather than income.
Is there cause for hope? As home ownership rates fall the population demanding change will grow. In the aftermath of Brexit and the reforming of British political coalitions there is likely to be a significant voice for those who do not benefit from the status quo. However, the mainstream political debate lacks nuance and vision. It is largely focused on incentivising private sector house building and subsidising home ownership. No major political party is calling for policies which would fundamentally reduce housing costs, indeed this is probably a political impossibility, however a major expansion of social housing provision could provide an alternative for those for whom home ownership is not a realistic option.
Note on data:
The Ipsos Mori poll asks respondents two questions:
Q What would you say is the most important issue facing Britain today?
Q What do you see as other important issues facing Britain today? (Unprompted - combined answers - %)
The data was drawn from their archive which stretches back to 1974.
 Ryan-Collins, J. Why Can't You Afford a Home? (John Wiley & Sons, 2018)