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Why we need to support owner occupation

Beyond such background noise, however, there is now serious debate taking place in many quarters about the future of the private rented sector, and its impact on wider public policy. In short: a growing number of people are waking up to the negative consequences of an expanding 'generation rent', which is the flipside of the steady rise in the number of private landlords over the last decade.

Let's start with the fiscal policy consequences. If members of 'generation rent' reach retirement and are still in the private rented sector, very few - if any - will have a private pension adequate to pay their rent, even if they have been the most diligent of pension savers. Instead, they will fall back on the state in the shape of means-tested housing benefit.

Last year, the Strategic Society Centre published some basic estimates of the eventual cost to public spending if only half of today's 20-somethings get on to the property ladder by the time they retire - an assumption some academic projections would suggest is optimistic. The results weren't pretty: the costs of Housing Benefit to the state would rocket by many billions of pounds each year.

But it gets worse: consider pension policy. If you expect to rent throughout your life, does it actually make sense to save for a pension, since most of what you save will be means tested away when you face using your pension to pay for your rent? In fact, if you don't think you will ever manage to become a homeowner, you will probably be worse off overall if you do the right thing and put money aside to provide a pension in old age. This is troubling for policymakers currently in the middle of the biggest shake-up to workplace pensions in a generation.

What these points demonstrate is that governments confront very compelling reasons for maximising sustainable rates of owner occupation across society, besides the fluffier arguments often made around the link between people owning their home and things like 'community capital'.

A kneejerk response would be: "build more homes". The UK certainly needs to get a grip on its house-building crisis. But even if supply does pick up, will this actually result in more people owning their home? Is there not a risk that the growing proportion of the housing stock given over to private rented sector will continue to rise regardless?

Exploring this question was one of the reasons that earlier this year the Strategic Society Centre published a big piece of quantitative research on private landlords - using a government-funded social survey called the 'Wealth and Assets Survey'. It was an opportunity to hold up a mirror to the economic and demographic characteristics of private landlords, comparing landlords to other homeowners, tenants and the wider population. The research showed the enormous chasm in wealth and income between private landlords and their tenants.

Some dismissed this as stating the obvious, but such a glib response misses the point: if the growth of private landlords is left unchecked, there is no way that policymakers will be able to lift rates of owner occupation across society - with all the disastrous long-term consequences identified above.

The conclusion - as we explored - is that governments need to give serious consideration to reining in the economic power of private landlords, for example, by capping the availability of new buy-to-let lending. For an individual landlord playing by the rules, this may seem unfair. But as a society, the policy impact of the growth in private landlords is becoming too great to ignore.

James Lloyd is director of the Strategic Society Centre. You can download the Centre's 'Whose Home?' report here.