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Guardian: Gordon's H P I Has Caused A Return To Victorian Disparities

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The price of house mania

By pandering to those who own their homes, politicians fuel a very damaging dependence
Adam Sampson
Friday October 12, 2007
The Guardian
Elections, even phoney ones, tempt politicians back on to safe turf. The past few days have signalled that the traditional electoral signifiers - crime, health, education - have been joined by another: home ownership. With homeowners in 70% of households, there is an inbuilt majority in favour of measures to protect their status. The political strength of pandering to this pressure group by promising cuts to tax on housing wealth - stamp duty, inheritance tax and capital gains tax - has been great enough to turn the polls, delay an election and force last-minute changes to Labour's pre-budget report.
Worship at the altar of home ownership is clearly good politics, but is it good policy? There are reasons to believe so. Surveys show that 84% of people want to own a home in the next 10 years. Ownership creates stability, improves behaviour. It is lauded as a solution to declining neighbourhoods and estates - entice homeowners and you create a critical mass with an interest in investing in a community's future.
But is the consensus in favour of ownership right? Ownership is not an unmixed blessing: many poorer owners find themselves with an asset but no income to maintain it, and the cost of getting into the market is spiralling.
Home ownership is driving a return to wealth disparities that we have not seen since the Victorian era. Whereas the space that rich people occupy is increasing, the poor are living more cramped lives. And the rise in house prices is reducing social and geographical mobility, with people far less able to move from the north to the south or from poorer areas to richer ones

Gordon has achieved what no Tory government could have got away with (or even desired to get away with) in a million years. Bottom line: the miracle has impoverished the majority who are deluded into thinking that debt is illusion and house prices real. Gordon's popularity will sink along with the vehicle that made him popular: illusional HPI.

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