Reading. Read through Text I and do the tasks that follow.

Read through Text I and do the tasks that follow.

The desire to own the place where you live is almost universal in Britain. However, house prices are high. This dilemma is overcome by the mortgage system, which is probably a more established aspect of everyday life than it is anywhere else in the world. About 70% of all the houses in the country are occupied by their owners and almost all of these were bought with a mortgage. At any one time, half of these are owned by people who have borrowed 80% (or even more) of their price and are now paying this money back month by month. The normal arrangement is for the borrower to pay back the money over a period of twenty to twenty-five years. The financial institutions known as ‘building societies’ were originally set up to provide mortgages. In the 1980s, however, regulations were relaxed, so that banks now offer mortgages as well.

People are happy to take out mortgages because house prices normally increase a bit faster than the general cost of living. Therefore, most people can make a profit when they sell their house. So strong is this expectation that phrases such as ‘first-time buyer’ and ‘second-time buyer’ are well-known. The former can only afford one of the cheaper houses available. But around ten years later, when some of their mortgage has been paid off, they can become the latter. They sell their house at a profit and move into a more expensive house.

Although nearly everybody wants to own their house, it is only in the last quarter of the twentieth century that a majority of people have done so. Before that time, most working-class people lived in rented accommodation. At one time, most of them rented from private landlords, some of whom exploited them badly. In the 1950s and 1960s, however, millions of homes were built by local government authorities. By 1977, two-thirds of all tenants lived in these ‘council houses’ (or, in some cases, flats). Council rents are subsidized, so they are low. Each local council keeps a waiting list of households who want to move into a council property. The order of preference is worked out by a complicated set of priorities. Once they are given a council house, tenants have security; that is, they do not have to move out even if they become rich.

From 1950 to 1980 the proportion of owner-occupiers gradually increased. The ambition to own was made easier by policies of tax relief. Some of the interest which people paid on their mortgage could be subtracted from the income tax they had to pay and people selling their houses did not have to pay ‘capital gains tax’ on any profit. With both owner-occupiers and council tenants increasing in numbers, the percentage of people who rented from private landlords became one of the lowest in the world — and continues to be so.

Then during the 1980s, the number of owner-occupiers increased more sharply. A major part of the philosophy of Thatcherism (under Prime Minister Margaret Thatcher) was the idea of the ‘property-owning democracy’. Council tenants were allowed to buy their council houses and were given financial incentives to do so. The deregulation of mortgage-lending also encouraged house-buying. So did an increase in the financial help given to owners who wanted to make improvements to their property. At the same time, local councils were severely limited in the number of properties which they could build and were also encouraged to sell their properties to private ‘housing associations’. As a result, the number of council tenants actually decreased.