Is the age of ownership over?

"In a society where we are encouraged to take ownership of our future, we’re renting it instead," says Patrick Mulrenan, Course Leader in Community Development.

Date: 03 March 2020

In recent years, there has been some anxiety about the way Airbnb is changing our cities. It has been accused of hollowing out cities such as Barcelona, and 77,000 homes in London are listed on the Airbnb website. We facing a paradox in the housing market in our capital: one in fifty properties are rented on Airbnb, while one in fifty Londoners are homeless. We put tourists in houses, and homeless families in hotels.

I would argue that this is not just an issue of international tourism. We are living through a period when ownership is declining, and we increasingly pay others to borrow their assets. Take the example of music. We can stream a huge variety of music, but we don’t physically own it; in the last year the sales of CDs fell by a quarter. Or transport. One in six younger people are looking to lease their next car rather than buy it, compared to one in fourteen older drivers, and the streets of London are increasingly littered with rental bikes.

Housing is just once aspect of this change. To demonstrate this, lets’ have a look at what happens to homeless families. One of the main causes of homelessness is eviction from the private rented sector. Tenants can be asked to leave at the end of their six-month lease, with no reason required: this is in fact one of the main causes of homelessness in this country. The council will place the family in temporary accommodation. Previously this would probably have been another six-month private tenancy, but landlords have realised that renting property by the night is more profitable than giving even short-term tenancies. Nightly-let temporary accommodation has 500% since 2009, and a quarter of all temporary accommodation is of this type.

With luck they after a few years be offered social housing, but may well find they are offered a one year ‘probationary tenancy’ followed by a 5 year fixed-term tenancy. Many social landlords now offer these instead of lifetime tenancies. If they need furniture, perhaps they can rent that from IKEA rather than buying it.

Maybe renting your phone, your home, your transport and even your clothes makes economic sense. Peoples’ lives can be more flexible, and they can afford assets they could not afford to buy. But a useful maxim in understanding social policy is ‘follow the money’. After a sustained period of low interest rates and growing inequality, it could be argued that this new ‘flexible’ lifestyle is really benefitting those who can afford to buy assets, and then rent them out. In a society where we are encouraged to take ownership of our future, we’re renting it instead.

Patrick Mulrenan