The headlines greeting the decennial 2011 census have focused on changes in country of origin and religious affiliation, but these simply reflect continuing trends that are either worrying (foreign neighbours!) or thrilling (better restaurants!) depending on your general outlook on life. The ethnic mix is a feature of a world in which labour mobility and international education are increasingly common. What should worry those parts of the UK that remain overwhelmingly white is that their exclusivity is a sign of economic poverty. As for religion, the census figures have always been misleading as they reflect emotional allegiance rather than participation (do the Jedi Knights actually have harvest festivals?), which is why they will continue to gradually but inexorably decline.
The more significant news, I'd suggest, is the change in housing tenure. Even here, most media commentators have focused on the decline in home ownership as the corollary of increased renting, which is hardly news. The huge sums diverted before the 2008 unpleasantness into buy-to-let properties were not a sign that the bottom was falling out of the rental market, while the continuing under-supply of affordable housing has been conscious policy for decades. What is news is that we reached an inflexion point in home ownership ten years ago, round about the time of the last census in 2001. As the HomeOwners Alliance lobby group put it:
The decline in homeownership started well before the financial collapse and housing market crash – it started in the easy credit boom years in London in 2000, and the rest of the country followed. Homeownership levels across the UK have been declining since 2002, five years before the credit crunch of 2007. But the decline has been notably accelerated by the drying up of mortgage credit, as well as rising unemployment, with homeownership levels currently dropping by almost 1% a year.
Parallel to this decline, the number that now own their home outright has increased. Homes owned with a mortgage or loan dropped from 8.4 million
(39% of all households) in 2001 to 7.6 million (33%) in 2011. Homes owned outright increased over the same period from 6.4 million (29%) to 7.2
million (31%). Some housing market experts now anticipate that non-mortgaged owners will exceed the mortgaged as soon as 2014. That date will probably also see the number of private renters exceed the number of social renters (i.e. renting from the council or a housing association). The former have increased from 1.9 million homes (9%) in 2001 to 3.6 million homes (15%) in 2011. The next couple of years will therefore witness a watershed in terms of housing tenure composition.
Does this matter? I think it does, for two reasons. First, outside of the super-rich, people who own their homes outright tend to be less willing to sell and trade on. This is largely a factor of age, i.e. that they pay off their mortgage in their 50s or early 60s. After a couple of decades of trading up (in most cases), they're probably happy to sit still once the music stops, certainly since Spanish villas went out of fashion. The problem is that these properties are then less likely to return to the market. Even on death (or when they need funds for a care home), there is now a good chance that the property will be occupied by an inheritor (the destiny of many a baby-boomer's child who could not otherwise afford a mortgage), even where the inheritance is split across multiple children (I suspect open market selling will be a third option after an inter-sibling sale of shares or an agreement to let the property and divide the rental income). In other words, such properties are likely to stay within the family. The second reason is that buy-to-let properties are less likely to to be converted to owner-occupied homes as their revenue stream is a hedge against both inflation and a potential property price crash. Baby-boomers, or even those in their 40s who were able to invest before 2008, have long seen buy-to-let as a pension fund. They are probably going to sweat their assets.
What this means is that, short of a massive housebuilding programme, the supply of properties on the open market for purchase by owner-occupiers via mortgages will remain constrained. The drop in house sale volumes since 2007 is not likely to reverse any time soon. This will keep property prices high, which will please builders (they prefer high margins to high volumes), existing homeowners, and (by extension) certain political parties. It will further limit social mobility and will reinforce the trend towards a rentier mentality. The ideological opposition to higher inheritance or property taxes is likely to grow further on the right, leading to calls for outright reduction or abolition (the freeze on council tax revaluation is a de facto real-terms reduction for the upper bands). The popularity of the mansion tax among LibDems is based on the assumption that it won't catch the majority of homeowners, just rich oligarchs in Kensington and Chipping Norton.
The more I look at the current political establishment, and its knowing acquiescence in this dynamic, the more I see a childish nostalgia for the Edwardian era (Cameron, Clegg, Osborne and Johnson could be transplanted with zero adjustment - Gove would be shown the tradesmens' entrance). The popular resonance of Downton Abbey is perhaps less about the upstairs-downstairs class boundaries and cultural snobbery and more about the attraction of unearned income. The census implies we are losing our faith in religion, but not our faith in property.