The slump in home ownership is reported today as a bad thing. Many Conservatives, who
believe that home ownership releases what the late Shirley Letwin called “vigorous
virtues“, may agree. So might Labour, which came to regret its opposition to the Thatcher policy of allowing council tenants to buy their home.
Like inflation targeting, home ownership was a solution that worked so well in the 1990s that it was vigorously pursued in the next decade. But here’s the rub: it had disastrous effects. In this case, the disaster was governments pursuing greater home ownership as a policy goal. This meant cheap loans, which meant subprime mortgages, which meant a credit bubble.
Our contributing editor Dennis Sewell wrote
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