I’ve tried the following question with quite a few people now and no-one has got it right (I wouldn’t have if you’d asked me in advance). The question is simple; in a recent opinion poll the polling company asked for satisfaction ratings across a full range of Scottish Government policy.
In all cases except for ‘Covid response’ the Scottish Government has negative approval ratings – but in what policy area was net dissatisfaction ratings lowest? Or to put it another way, on average over all of Scottish society, on which policy issue do most people feel they are being let down?
The most common answer people gave me was ‘the NHS’, but while its disapproval ratings are marginally higher than those of the correct answer, its satisfaction ratings are higher too, so net-wise it is actually mid-table. Transport was also picked quite a few times but actually at -18 per cent transport is one of the better results for the Scottish Government (only culture, environment and independence have lower disapproval ratings).
One person raised gender reform and yes, it is the second most unpopular area of governmental performance and comfortably the most disliked – but it also has a reasonable ‘approval’ rate so net-wise it just about manages not to be last.
What no-one picked was the correct answer – housing. Housing is the subject area where the Scottish Government has left the ‘averaged Scot’ least happy, and yet it is generally seen as not a particularly hot political issue. Housing is treated as ‘done’ by our political culture, give or take a few tweaks. (Now you know the answer, the poll is here.)
You can tell that it’s not a political issue because politicians go after two things when picking subjects for debate – where they think their opponents are weak and where they think the public is not on their opponent’s side. So when none of the opposition parties in Scotland regularly lead on housing issues, they clearly think the Scottish Government is doing OK or that no-one cares.
How has that happened? How has a subject which no-one in the political sphere (not the politicians, not the journalists, not the commentators, not the quangos) seems to think is important turned out to be a stand-out for the public? How did they miss this?
The answer is important in a whole number of ways. Most of this is to do with how dumb political orthodoxies tend to be. These are ‘statements of political reality’ which are really negotiated between politicians and tabloid journalists with a bit of input from pollsters. Which is to say they have surprisingly little to do with actual voters.
Thus it is universally agreed in politics that housing ‘isn’t an issue’ because the Thatcher revolution means ‘everyone’ owns a house now and they’re all increasing in value and will forever so there is no political capital in caring about housing. (By ‘everyone’, political insiders always mean ‘everyone who votes regularly’).
To explain this the phrase ‘property ladder’ is helpful. If ‘property ownership’ is a ‘ladder’ then once you’re on the ladder the only way is up. So as long as most people (who vote) are on the ladder then there is nothing much else to do but sit back and keep doing things which inflate the housing market to propel you up that ladder.
Now of course there genuinely is some political awareness that ‘young people’ now struggle to get onto the first rung of this ladder, but ‘first rung’ is almost universally seen as the problem. If only young people (the ones who are going to go on to vote when they get a bit older) can be gotten onto that ladder, all is fine. But they don’t really vote in enough numbers just now so that doesn’t matter right now.
The problem with this orthodoxy is that it is wrong in almost every way. I turned 50 at the very end of last year. Of my group of friends, four of us ‘got on the property ladder’ when we were in our 20s (i.e. the 1990s). Two of us made a real-terms gain when we sold, but in both those cases we had bought houses that needed a lot of renovation. The other two did not. They sold at an increased rate but since the rest of the market rose too, their finances were stretched even further when they ‘upgraded’.
This is the point; people in their 50s just now are on the cusp of whether they were lucky to get in on the giant housing Ponzi scheme or whether they were its victims. Because by the mid-1990s anyone with money was being advised to buy up multiple properties and ‘undervalued’ houses disappeared very fast. Anyone at all under 50 and plenty people in their 50s did not benefit.
Then of course the vast majority of those who did benefit will have done so on the basis of mortgages timed to be paid off by 65. Housing isn’t really an issue for them any more. Which means the number of people who are still really gaining out of rising house prices is small and getting smaller all the time.
The parallel to this is that the number of people who are being screwed by the housing market is rising all the time. I was one of the two of my friends who bought the right house at the right time. When I chat to one of my friends who didn’t, the subject comes up regularly. He’s got a good income, a nice house – but he has to work long hours to meet the mortgage payments and non-essential spending is pretty tight, more-so than you’d expect for a senior professional.
That is something I picked up about five years ago. I had been asked to do a talk to the AGM of Citizens’ Advice Scotland and so at lunch I was surrounded by Citizens Advice Bureau managers. I asked what was their fastest-rising issue and quite a number of them told me ‘over-mortgaged professionals’.
This is the culture of the ‘property ladder’ – you’ve got the job, now get the house and the car to match. Got them? Good, now start shopping from the bargain bin at the supermarket ‘cos you worked out your family accounts based on a small part-time income from your partner and they just lost that income and now you have no money.
Meanwhile those ‘young people’ not on the property ladder? A lot of them are now in their early 40s and they’re still renting at extortionate rents. And they’re voting now. Even if you get them on this mystic property ladder and even if you keep inflating house prices, it will do them no good whatsoever.
They will of course inherit the wealth from their parent’s gains, but not any time soon – the average age of someone who gets an inheritance now is 61 years old. Your parents are living longer so by the time you get the housing wealth you will already have failed on the housing ladder.
This poll tells me that we are on a major cusp. For 40 years there have been a load of Thatcher-based orthodoxies in politics (people say they like public services but really they want low tax, voters will tell you they’re not racist but they are, you can’t win elections against a hostile media and so on). On the housing orthodoxy it looks like everything may be about to flip upside-down.
Because we’ve already reached a point where a big, big majority of people in Scotland would benefit substantially if there was a freeze in all house prices. In fact if there was a cash-term freeze and inflation was allowed to erode the crazy income-to-house-price ratios, a great majority of Scotland would do well out of it.
The alternative is actually quite scary. When I was buying it was universally accepted (and had been for a long time) that the affordability calculator was that you could probably afford to finance a house up to a value of three times your salary. The average UK house price is now more than six times average salary and house prices are still rising faster than wages.
This means that more and more of the housing market will be very wealthy people buying up real estate (the only people who can) and renting it to those kept off this housing ladder they’ve heard about, but still charging them crazy-high rent to cover the cost of this over-valued property whose value keeps rising and rising.
That means that government policy has in effect completely severed the housing system from its own market. In a normal market prices would be correcting themselves and maintaining something like a link to affordability.
But there is another player here – the big property developers. These are some of the wealthiest businesses in Britain and they are the one interest group which will always do well out of increasing housing costs. They more than anyone have caused the break between market and householder because land is finite and they’ve monopolised it through dominant market position and land-banking (buying land but not developing it to limit supply and keep prices high).
And if there is one thing we know it is that when the housing developer’s lobbyists shout ‘jump’ the Scottish Government only pauses to enquire as to ‘how high’. Because it too is wholly bought in to this outdated orthodoxy and has no vision.
Common Weal has explained many times how to fix this (too much work to link to it all but Good Houses for All has the main detail and Sorted summarises our position more widely, with retrofit covered in the Common Home Plan). The problem isn’t that the Scottish Government doesn’t have the powers – it does.
The problem isn’t that the policy solutions to bringing down real-terms house prices is complex – they’re not. The problem is that there is no more orthodox a political orthodoxy than ‘rising house prices are always popular with voters’. Nor is there any orthodoxy more wrong.