A Place to Call Your Own: the history of mortgages (Part II)

POSTED: 14th April 2014
IN: Personal News

Last week we looked at what the history books could tell us about the first shoots of the mortgage concept. But that doesn't explain how mortgages came to be such a stalwart of British life.

This week, historian Paula Chorlton investigates how the modern-day concept of home ownership has emerged over the last 100 years.

Social housing & the desire to own 

From the end of the First World War through to the early 1970s, governments were largely concerned with solving the endemic problem of inherited Victorian slums. These dank and overcrowded neighbourhoods characterised sizable areas within British towns and cities, largely as a side effect of the industrial revolution, the subsequent rapid urbanisation, population growth and an unregulated market.

Essentially, land and property values meant that a large number of working people were unable to move out of congested city and town centres. These areas lacked amenities, suffered from damp, and affected the health of the people who lived there. The houses were largely privately rented, and national attempts at rent control had in some cases made conditions worse.


                                                              undefined      A victorian slum


One answer to the problem was building large-scale socially rented housing estates, where the local authority would act as landlord. A number of attempts at social housing were made during this period, each of them dogged by economic problems and material shortages. The first large-scale intervention came from the Liberal government of the early 1920s, who fathered the 'Homes-for-Heroes' concept of house-building for renting to the working classes. This was a promise to improve the living conditions of soldiers and their families who had fought for their country, amidst concerns of the potential for unrest if life didn't get better (Swenarton, 1981).

The Second World War saw 6 years of low activity in the housing sector, as attention was focussed on the war effort. Houses fell into disrepair and obsolescence, as it was impossible to keep up with repairs and building maintenance. When added to the localised devastation caused by enemy bombing, this meant that the end of the war saw an even bigger number of houses that needed to be replaced.

Later attempts at social housing by the Labour Government post-WWII were also scuppered by a series of barriers, including material shortages, rising costs, the economic crisis of 1947 and the loss of the 1951 general election to the Conservatives. It wasn't until the 1950s that a dramatic change in the pace of slum clearance and replacement building took place - albeit afflicted, once again, by cuts. 

By the later 1950s, the Conservatives were able to boast impressive house-building completion rates in the private and public sector. All of this building was coupled with the encouragement of home ownership throughout the 50s and 60s as part of the Conservative ideal of a 'property owning democracy'. Stamp duty was reduced and loans provided to building societies, whilst in the Conservative manifesto of 1951, Harold McMillan wrote:

"A Conservative and Unionist government will give housing a priority second only to national defence. Our target remains 300,000 houses a year. There should be no reduction in the number of houses and flats built to let, but more freedom must be given to the private builder.In a property-owning democracy, the more people who own their homes the better."

When the Tories gained power in 1951, only 29% of households were privately owned, but by the time they were voted out in 1964 this figure had risen to 45%. At a time when real incomes had risen by over 50% within two decades, accompanied by full employment and uninterrupted economic growth, it's easy to see why a substantial rise in home ownership would take place throughout this period. Indeed, classic historic and sociological studies have seen this period as one of relative affluence for most people (Zweig, 1962). The property-owning democracy was becoming a reality.

After a bumpy start to the 70s, during which the optimism of the post-war decades began to wane and rapidly rising prices clashed with economic stagnation, a change of Government from Conservative to Labour took place in 1974.

A place to call home

However, the Conservatives were still driving the home ownership ideal, with Julian Amery, the Conservative minister of housing and construction, declaring in 1971:

"What better to invest in than a home which will certainly appreciate in value and will, at the same time, give a man a feeling that there is a bit of England which is his family's own… it will be endorsed as the primary aim of those who today cannot, or think they cannot, achieve it.

So what of social housing? In 1977, under a Labour Government, the Housing (Homeless Persons) Act removed social housing's association with general provision for the population, transforming allocation practices into considerations of need. Those families and individuals who now fell outside of the allocation qualifications for social housing had a choice between private renting and buying. At this time, home ownership continued to be within reach of a wide range of people, a trend continued throughout the 1980s.

Though established as part of the principles of a 'property owning democracy' defined in the 1945 Conservative election campaign, it was the 1980s that saw the growth of the controversial right-to-buy policy. This saw large numbers of socially rented homes move into the private sector. Meanwhile, local authorities were no longer able to build new houses on the same scale, and in any case by the end of the decade the housing stock in many areas had been transferred to other social housing bodies. The decision to extend the Right to Buy scheme has been seen as a continuation of wider moves to privatise large parts of the economy in keeping with the tenets of Thatcherism (Brown & Sessions, 1997). Again, the Right to Buy scheme (and its popularity) can be seen as an indication that home-ownership was becoming valued and desirable for a lot of Brits. 

And so we come to the modern day, where, having suffered at the hands of the housing bubble of 2008, house buyers are now gaining confidence in ownership once again. Throughout the twentieth century, attitudes have transformed, and access has increased, resulting in proprietorship becoming a widespread aim in British culture.


Sarah Brown and John Sessions, 'Housing, Privatization and the 'Right to Buy', Applied Economics 29, (1997), pp. 581-590; P.King,Housing Policy Transformed: The Right to Buy and the Desire to Own,(Bristol, 2010).

Mark Swenarton,Homes Fit for Heroes: The Politics and Architecture of Early State Housing in Britain,(London, 1981)

Ferdynand Zweig,The Worker in an Affluent Society,(London, 1962).


Images used courtesy of Wikipedia

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