British Prime Minister Margaret Thatcher points skyward as she receives standing ovation at a Conservative Party Conference on October 13, 1989.
British Prime Minister Margaret Thatcher points skyward as she receives standing ovation at a Conservative Party Conference on October 13, 1989. 

In the Woody Allen film Everyone Says I Love You, the lone Republican son in a Manhattan household becomes a Democrat, but only after an arterial blockage is surgically removed, allowing more oxygen to reach his brain. In real life, changing one’s political opinions rarely requires such severe measures. Instead, among British voters in the 1980s, it was buying a home that made all the difference.

In the United Kingdom in the 1980s, government interventions in housing helped persuade a majority of voters to back the Conservatives. A liberalization of mortgage lending and the creation of the Right to Buy policy—which permitted and indeed subsidized renters in social housing to purchase their own units—led homeownership rates to rise ten percentage points between 1981 and 1990. Three million more households became owner-occupiers, including over a million of the skilled working class—the famed “C2s” in the National Readership Survey social grade system commonly used by British pollsters. In every British election since at least 1979, those who owned their homes outright voted for the Conservatives. A similar pattern is visible in the United States. Given this trend, it is worth examining how exactly the Conservative Party in the 1980s won over homeowners and what today’s Conservatives can learn from it.


There are several potential explanations for why homeowners in the 1980s favored the center-right. One is that homeownership gives people a stake in continuity over change, implying more voter support for the Conservatives, traditionally the party of the status quo. But Tory Prime Minister Margaret Thatcher’s years in power were clearly ones of great change, and in more recent times, owner-occupiers who owned their homes outright voted for the uncertainty of Brexit 55-45 percent. It is just as plausible that homeownership disposes owners to more risk and change rather than less. In 1979, after all, Labour was still the party of the status quo.

A better view is that a home is typically the largest single asset a person can own, and the center-right is typically friendlier to asset prices than other parties. In other words, being well-off makes one more predisposed to back the center-right, and homeowners are more likely to be well-off. One study of British lottery winners from 1996-2009 showed that winners were more likely to vote Conservative. The change happened immediately in nearly a fifth of cases. Political opinions are surprisingly flexible.

The asset price view is important, but it is not the whole story. Voters in the 1980s did not vote Conservative entirely to maximize profits. (For one thing, the housing price gains since then—now running at nine times their value in 1981, without including rents—were simply unimaginable.) Voters also favored the Conservatives because they believed their policies fostered a general sense of well-being, of which financial security was just one pillar. The other pillar consisted of idealized notions of the good life, including increased material comfort and freedom from state control. Histories and memoirs from the period illustrate this. Buying one’s home meant, for one thing, fresh bathrooms. As late as 1981, 3.7 million British households either lacked an inside toilet or bath or had to share them with another unit. By 1991, only 259,000 did.

Former Labour minister Alan Johnson notes that, for those who took up Right to Buy, owning one’s home brought a swath of new freedoms and opportunities large and small. It meant being free from rules restricting the height of private hedges to three feet six inches. It meant the long-denied ability to choose the color of your own door—in fact, tenants could change the door altogether if they wanted. Frequently, the first act after buying was to paint the door the color of one’s choice, as a visible symbol of being a homeowner. Most importantly, owning one’s home meant the ability to sell up and move away from cramped surroundings.

In the United States, the Republican Party during President Ronald Reagan’s years in office also used housing policy to promise the good life—particularly freedom from state control. U.S. homeownership rates actually contracted during the Reagan years, but the ability of the GOP to attract suburbanites mobilizing against affordable housing, busing for school integration, and Section 8 housing vouchers contributed to Reagan’s domination of the suburban electorate, which he won 55 percent to 35 percent in 1980 and 61 percent to 38 percent in 1984.

Economic historian Avner Offer observes that postwar economic policy in advanced economies can be summed up by two innovations—social democracy and market liberalism. Social democracy, which makes transfers from producers to dependents by means of progressive taxation, was chiefly marked by a rise in public expenditure, which reached a crisis point in the 1970s because of a crisis of profitability among the producers. Market liberalism, which uses financial markets to transfer financial entitlements over time, was mainly transmitted through the rise in household debt, especially mortgage debt, which reached a crisis period in 2008.

Although the left championed social democracy and the right market liberalism, to the average citizen, each was really one part of the same project to provide financial security for families. Housing wealth, in Offer’s view, “may even be regarded as the next progressive innovation beyond social insurance.”


Today, however, both social democracy and market liberalism are in crisis. Government spending cannot increase much without scaring businesses and individuals, causing them to flee to other jurisdictions. Homeownership today is arguably no longer a force for financial security but for insecurity and financial instability. Politicians and voters increasingly blame housing for everything from wealth inequality to lower labor mobility to the declining labor share of income.

What to do about housing has therefore become politically important once again. At October’s Conservative Party conference in Manchester, there were no fewer than 20 panels on housing. This followed from the outcome of a grim General Election in June in which the party comprehensively lost younger voters. Those under the age of 40 voted 60-23 percent for a left-wing Labour Party led by Jeremy Corbyn, with much of that support driven by generational anger about housing. The issue shows no signs of retreating. Three-fourths of the country now thinks there is a “housing crisis,” according to pollsters. The Grenfell Tower fire in June also contributed to the crisis narrative.

What to do about housing has become politically important once again.

Moreover, these political crises have come amidst new reports from the Resolution Foundation, a non-partisan think-tank that focuses on British living standards, suggesting that the homeownership rate in the United Kingdom has been markedly overstated. The country is already near the point where half the country thinks like renters rather than owners. 

The experience of the 1980s holds several lessons for today’s center-right on housing. The first lesson is that the issue cannot be ignored. The bifurcation between property-haves and property-have nots has substantially worsened since the crisis. Households with below-average incomes have seen rent increases of 32 percent between 2008 and 2016, while those with above-average incomes have faced cuts in housing expenses of around 17 percent over the same period. The multi-faceted housing problem operates as a negative feedback loop, with high prices and high rents swelling dissatisfaction among younger and poorer voters, who then refuse to vote Conservative. The Tories then become increasingly dependent on a diminishing base of elderly and better-off voters, who naturally want asset prices to stay high.

The situation is therefore deteriorating quickly for the Conservatives. Polling since June showed that the Conservative vote share declined much more precipitously among 18-24s than across all voters in aggregate. To begin to tackle this, Conservatives must avoid statements of the kind that House of Commons Leader Andrea Leadsom made when asked about the party’s offer to young people. She listed looming innovations—including driverless cars, space rocket launches in the Scottish Highlands, and the prospect of robots picking strawberries—as reasons that young people should be excited. But rather than amusing themselves with spurious futurology, Conservatives should make housing a central plank of their electoral offer in the here and now. There are signs that Chancellor Philip Hammond may do just this in this Wednesday’s budget.

A second lesson is that focusing solely on homeownership misses the point. Right to Buy and financial liberalization in the 1980s worked because they created financial security and comfortable living conditions for families. Today, a self-perpetuating cycle of higher prices and higher mortgages is likely to do the opposite. To their credit, the Conservatives have already recognized this. According to the thorough white paper released earlier this year by the Minister for Communities and Local Government Sajid Javid, government policy is now to increase housing supply “across all housing tenures.” This means large-scale build-to-rent housing, longer tenancies in the private rented sector, banning broker fees to tenants—an “all of the above” approach.

Third, Conservatives should remember that housing is primarily about financial security but also about well-being. Aspirations today are less about throwing off the meddling hand of the state than about making it work sensibly. Groups such as Create Streets have emphasized relaxing planning regulations so that local areas can opt for high-density buildings on streets instead of imposing no-go cul-de-sacs thick with tower blocks. One British poll showed that, given four choices, around 90 percent of respondents chose Georgian or Victorian building styles rather than the two contemporary ones. But few know that the Georgian and Victorian townhouses they admire are nearly impossible to build under planning laws. This is just one example where housing policy can win voters by focusing on non-financial concerns.

Finally, today’s Conservatives need to go beyond the supply-side mantra of “build, build, build” and also constrain demand. Increasing the supply of housing is indeed crucial, but it must be accompanied by measures that dampen lending as well. Since there will never be enough houses for everybody at a sufficiently low price given shrinking household sizes, demand for second homes, and current levels of migration, policy must privilege first-time buyers over other buyers—as indeed Help to Buy, which subsidizes house purchases for first-time buyers, has already done. Second homes are now also subject to additional stamp duty tax. Meanwhile, the Bank of England has already capped mortgage lending at 4.5 times a household’s income, an unheralded retreat of nearly 40 years of credit liberalization that began in the late 1970s when the Bank of England first allowed commercial banks to offer mortgages. (Prior to that, only building societies were permitted to.) If the goal is to increase financial security for the majority of citizens, then there should be no embarrassment for Conservatives in further tinkering with both supply and demand. Both are already intensely regulated.

Whatever the Tories decide to do, the lesson of the 1980s is to focus relentlessly on financial security.

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