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Homeownership: Perspectives and Policies


In many countries, the demographic shift towards an ageing population is occurring against a backdrop of welfare state restructuring. The paradigm of asset-based welfare may become increasingly central to these developments as individualised welfare is touted as part of the response to the challenge of funding the care of an ageing population. This article focuses on the framing of housing wealth as a form of asset-based welfare in the UK context. We consider the strengths and weaknesses of housing as a form of asset-based welfare, both in terms of equity between generations and equality within them. We argue that housing market gains have presented many homeowners with significant, and arguably unearned, wealth and that policy-makers could reasonably expect that some of these assets be utilised to meet welfare needs in later life. However, the suitability of asset-based welfare as a panacea to the fiscal costs of an ageing population and welfare state retraction is limited by a number of potential practical and ethical concerns.

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The post-communist privatisation of state flats to sitting tenants has transformed Romania into a nation of homeowners; yet its popularity appears perplexing given the poor quality of the stock and disappointing, given flat-owners’ subsequent lack of action regarding home improvement. Conversely, self-builders’ proactive agency moved them up the housing ladder. While this striking contrast draws attention to various structural conditions, which have constrained the former and enabled the latter, it also raises intriguing questions on residents’ meanings of home. By interrogating 48 homeowners’ narratives, this paper sustains the multilayered and multi-scalar meanings of home, which intertwine the socio-cultural territory of family and nation; the physical frame of one room or several dwellings; the emotional domain of object-memories; and the ontological realm epitomised by something as minimal as ‘my bed’. Findings demonstrate that flat-owners and self-builders do not significantly differ in their meanings of home but detached houses rather than flats facilitate more fully their appropriation.

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The objectives of this commissioned report were to identify and examine housing need and housing pressures in St Andrews and to outline recommendations as how these may be addressed. Following interviews with local organisations and housing providers, a survey of students and resident households and an interrogation of census and local authority demographic (especially age structure) and housing data (house prices, rent charges etc.), two dominant problems were identified: the shortage of affordable housing and the (over) concentration of student accommodation (HMOs – Housing in multiple occupation) in the centre of the town. The report’s recommendations – partially based on experience elsewhere, especially in other university towns - included: the drawing-up of a detailed housing strategy for the town by Fife Council in collaboration with community representatives to cover, inter alia: the development of an appropriate yardstick for student housing density, and the continuation of and a geographical extension of the present HMO moratorium; the construction of additional student accommodation by both private providers and by the University; and the development of a programme for affordable housing provision starting with the designation and development of a ‘social/mixed housing village’ at the Kilrymont site of Madras College when this becomes available.

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Dr Tom Moore has published a new working paper titled ‘Scaling-up or going-viral: comparing self-help housing and community land trust facilitation’. The paper is co-authored with Professor David Mullins at the Third Sector Research Centre, University of Birmingham. It explores the recent growth of community land trusts and self-help housing initiatives to see which forms of support have been effective in helping them flourish and discusses the implications of this for their future development.

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Cook N, Smith SJ, Searle BA (2013). Housing, Theory and Society.
This paper assesses the relevance of mortgage-led consumption for the assemblage of home. Drawing on qualitative research completed in the UK, we show how the materials and meanings of owner occupation are constituted by, and experienced through, the accumulation and deployment of secured debt. This is enabled by a particular financial regime, in which the proceeds of equity borrowing are freed for discretionary expenditure. Homes and their contents thus acquire the status of ‘debted objects’, and these form an interface between the financial and familial values comprising residential space. By attending to these mortgage-enabled purchases, we expose and evaluate the myriad ways in which equity borrowings animate the assemblage of home, adding value to property, linking domestic space with distant geographies, and inspiring the art of dwelling. (Link to follow)

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Ong, R, Parkinson, S, Searle, BA, Smith, SJ and Wood G (2013). Housing Studies.
This paper uses micro-data from two national panel surveys to analyse the flow of wealth from residential property onto households’ balance sheets, where it is available for discretionary spending. The examples are Australia and the UK – two of the world’s most entrenched nations of owner occupation, both with relatively complete mortgage markets. We focus on the early 2000s, which set the scene for an unprecedented wave of housing equity withdrawal. We consider equity released through sales and through additional borrowing. The findings show that equity extraction overall is not only (or even) a function of higher incomes, greater wealth and older age. Rather, it occurs across the life course, and is linked to pressing spending needs. We draw attention in particular to the growing social and economic significance of in situ equity borrowing – a practice whose financial buffering effects may form a short-lived prelude, rather than a sustainable alternative, to trading on or selling up.

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Wood, G., Parkinson, S., Searle, B. A. and Smith, S. J (2013) . In press for Urban Studies.
During the early 2000s, mortgage market innovation together with home price appreciation increased the scope for mortgage equity withdrawal. From a macro-economic perspective, this proved to be an increasingly important transmission mechanism for the wealth (particularly collateral) effects of housing. Micro-economic accounts of equity borrowing are less well developed, since standard models of savings and consumption rarely take housing wealth into account. This paper, however, builds on a small but growing literature assigning a precautionary savings role to consumption from housing wealth. The analysis uses panel data sourced from Britain and Australia to model households’ motivations for equity borrowing. Key among these motivations are pressing, uninsurable, ostensibly short-term, spending needs. In these contexts, we propose that equity borrowing assumes a welfare-switching role, substituting privately owned housing wealth for collectively funded safety-nets.

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The new suburban housing developments in post-socialist cities have been ubiquitous icons of socioeconomic and physical change. This paper examines suburban owner-built housing as a long-term strategy of home improvement in Romania. It analyses residents’ motivations and financial strategies to move up the housing ladder through owner-building and their responses to key neighbourhood problems, in particular poor public infrastructure and non-existent public facilities. It is argued that owner-builders generally benefitted from the economic informality, the relaxed legal culture and the unregulated housing context of the Romanian post-socialist transition; but the absence of public actors has weakened their achievements, which is most apparent at neighbourhood level. The paper draws attention to a context of politico-economic reforms and a set of socio-cultural values of housing privatism in which resident responses may frequently generate consequential (collective) problems localised at the level of streets, neighbourhoods or even the whole society.

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Socio-economic and physical change have visibly affected post-socialist cities, yet the state of decay of their inherited large housing estates has only deepened throughout the 1990s, despite the change in tenure through policies of large-scale privatisation. Housing disrepair has now reached a critical stage that requires rapid private and public intervention. This paper examines the extent to which Romanian block residents have been able to improve in situ their housing conditions since 2000, the strategies they employed and the challenges they faced. It focuses on the often ignored private domain of housing, flats and blocks, where changes are also likely to be less visible. By analysing the process of individual utility metering and the practice of collective block management, I argue that besides economics, the unregulated housing context and a relaxed legal culture have challenged individual and collective action and have generated a framework of housing privatism.

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Homeownership has become a ‘normalised’ tenure of choice in many advanced economies, with housing playing a pivotal role in shifts from collective to asset-based welfare. Young people are, however, increasingly being excluded from accessing the housing ladder. Many are remaining in the parental home for longer, and even when ready to ‘fly the nest’ face significant challenges in accessing mortgage finance. This under-30 age group has become ‘generation rent’. As this policy review emphasises, this key public-policy issue has created a source of inter-generational conflict between ‘housing poor’ young people and their ‘housing rich’ elders. To fully understand the complexities at play however, this paper argues that we need to look beyond the immediate housing-market issues and consider how housing policy interacts with broader social, economic and demographic shifts, and how it is intimately connected to debates about welfare. This is illustrated with reference to the UK, although these debates have international resonance.

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