Generation Rent: Similarities will resonate deeply with Irish readers
Book review: Chloe Timperley’s examination of the dysfunctional rental market lands every punch says Eoin Ó Broin
“Generation Rent: Why You Can’t Buy a Home (Or Even Rent a Good One) is ultimately the story of how the UK turned its youth into an asset class.” From that powerful opening uppercut, Chloe Timperley lands punch after punch on a rental system that is dysfunctional, demeaning and downright unfair.
Combining interviews with a wide range of tenants and landlords with Timperley’s own experience in the financial services industry, backed up with a healthy battery of academic sources, Generation Rent tells the human story of the private rental market in the UK.
The author paints a picture that will be depressingly familiar to many Irish readers. Developer-led housing policy, enthusiastically supported by politicians under the influence of property investors and big landlords, has pushed house prices beyond the reach of even those with good jobs. The result has left almost an entire generation trapped in the private rental sector with high rents, insecure tenancies and little hope of ever owning their own home.
Interestingly, in contrast to Irish media coverage, Generation Rent has been subject to a pretty nasty campaign from some sections of the UK press. From the comfort of their secure suburban homes, tabloid and broadsheet columnists bemoan the wasteful millennial snowflakes who apparently prefer the pleasure of avocado toast to the stability of a roof over their heads.
But, Timperley asks, does this avocado toast challenge really stack up? With the average cost of a deposit at £32,899 across the UK and a staggering £106,577 in London, the so-called Peter Pan generation would have to forgo somewhere between 39,000 and 125,000 avocados (at current Tesco UK prices) to raise the cash for their deposit.
Worse than this mediocre media browbeating is the government policy response to the ever-growing gap between incomes and house prices. Timperley caustically recounts the madness of politicians extolling the virtues of the “bank of mom and dad” (sounds strangely familiar, doesn’t it Leo?) and the inflationary help-to-buy policies of the Tories since 2012. (Hmm, where have I heard that before, Micheál?)
As it is here, so it is on the other side of the Irish Sea. House prices are simply too high and young people are left with the Hobson’s choice of living at home into their 30s or paying extortionate rents while desperately trying to save for a deposit.
Generation Rent also exposes some worrying new trends in the UK housing market. One that is particularly troubling is the growth of leasehold contracts in many help-to-buy equity loan products.
While leasehold is common, and even necessary in apartment developments, half of the leasehold help-to-buy purchases in the UK are houses. They come with an additional £252 charge to have pets and a flat fee of between £50 to £108 to respond to maintenance requests. It appears that even when you buy a home in the UK you are still renting!
Timperley is influenced by the growing body of progressive land and finance economists in the UK, such as Josh Ryan-Collins and Laurie Macfarlane. (For the record, so is this reviewer.)
In the book’s third section, How Homes Are Built, the author cuts through the guff of “build more houses and prices will fall” to reveal how the supply of land and credit drives house price inflation. Her conclusion is spot on: “The problem is that the legal system allows land to become a giant sponge that soaks up all the surplus wealth in the economy, while making it look like an inevitable force of nature.”
Alongside first-hand accounts of tenants struggling in a chronically under-regulated market, Generation Rent offers a rare insight into the world of professional landlords, property service companies (including eviction specialists) and “land promoters” who get rich off the back of speculative “option agreements” for future residential developments.
The book also details how successive Conservative and Labour governments undermined public housing. First the local authority sector was choked off through a combination of a right-to-buy and a refusal-to-fund of stock maintenance and replenishment.
Then came the creeping marketisation of the approved housing body sector, over time transforming them from not-for-profits to sub-market providers with devastating consequences, such as the Grenfell Tower fire.
The final nail in the coffin is the massive regeneration projects in London, where long-standing inner-city communities are cleared out to make way for high-end apartments and shopping districts. As the number of social homes provided in these new schemes is significantly lower than in the original estates, a large number of families, including those who bought their homes, are dispersed to the cheaper fringes of the city.
Timperley rightly locates the trials of Generation Rent in two policy failures: the under-provision of affordable public housing and an over-reliance on the private sector to meet housing needs. In a single phrase she crystallises the problem: “private investment and affordable housing don’t mix”.
Thankfully, Generation Rent is not shy in proposing real solutions. The concluding chapters offer a range of proposals, including a return to the golden era of social housing, comprehensive regulation of the private rental sector, and breaking the link between credit and land values by introducing land value tax.
There are many similarities between the housing systems in Britain and Ireland, in part because governments here have a tendency to blindly copy the worst features of our nearest neighbour. Even when our politicians depart from the fully fledged Anglo-Saxon housing market – such as our regulation of the private rental sector – they never seem to fully commit.
For this reason, Timperley’s brilliant Generation Rent will resonate deeply with many people in Ireland. Our “locked out generation” and their “stuck at home generation” friends are experiencing the same consequences of the same failed policy prescriptions as their counterparts in Britain.
They say the first step in curing a disease is good diagnosis. Generation Rent does much more than that. It names the problem. It highlights the very human consequences. But, more importantly, it offers a better way of planning and running our housing system. In doing so it offers Generation Rent some hope that things don’t have to be like this in the future.
Eoin Ó Broin TD is Sinn Féin’s spokesman on housing and author of Home: Why Public Housing Is the Answer