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12 June 2024

When Life is Like an Unfair Game of Monopoly


Edward Thomas Jones
Senior Lecturer in Economics
Bangor University

Imagine playing Monopoly and never being allowed to buy a property. That’s the reality of life for many people in Wales.

Homeownership has become an impossible dream for many and this has a considerable negative impact on their health and well-being.

Monopoly was one of my favourite games as a child. We used to play for hours, and a certain family member brought plenty of aggression to the game and ensured we had to play until everyone was bankrupt, bar the overall winner.

At its core, Monopoly is a simple game. Players go around the board according to the throw of a pair of dice. If a player lands on an unowned property, they have the option to buy it. However, if they land on a property owned by another player, they are required to pay rent to that player. Imagine playing Monopoly and never being able to buy a property. Imagine you just had to go around the board, collecting £200 every time you passed ‘Go’ and then having to give your money to those players that have been able to purchase properties. Unfortunately, that is how many people in Wales must live their lives.

According to the 2021 Census, there was an increase in the proportion of households that rented their accommodation in Wales, from 30.6% (399,000) in 2011 to 33.5% (451,000) in 2021. Of those that rented in 2021, 17.0% (229,000) rented their accommodation privately while 16.5% (222,000) were in the social rented sector, for example renting through a local council or housing association. For most renters, homeownership has become an impossible dream, and renting has a considerable impact on their standard of living.

There is a clear relationship between renting and poverty

The Institute of Fiscal Studies (IFS) has found that renters in the UK are considerably more likely than owner occupiers to have low living standards on a variety of measures. Private and social renters have poverty rates of 34% and 46% respectively, compared with only 12% for owner occupiers. Wales also exhibits a similar trend. Data from the Welsh Government shows that the risk of being in relative income poverty was 31% for those that rented their accommodation privately, 46% who rented from the social sector, and 13% for owner occupiers.

Housing costs are a first-order issue for poverty. According to the IFS, low-income families have become increasingly likely to be private renters and face higher costs as the stock of social housing has failed to keep up with demand. Tenants in the private sector face worse quality of homes (at least for low-income families), and rental accommodations are also more likely to have poor energy efficiency, be insecure, or be damp. A recent report published by NHS Wales outlined how renters had been hit particularly hard by the cost-of-living crisis; renters were unable to afford the high energy bills and therefore were more likely to live in cold and damp homes. Rented homes in both the private and social sector are more likely to be overcrowded and in areas of poor upkeep and appearance.

The impact of renting on a child’s well-being and development

In 2001 study, the Institute for Research on Poverty found that the asset poverty rate for homeowners is less than 10 per cent, compared with rates of over 60 per cent for renters. An individual is asset poor if their wealth is not sufficient to secure them a certain standard of living for a short period. Asset poverty is bad news for a child’s well-being and development. American researchers found that youngsters living in asset poor households suffered from an increase in problem behaviour and the negative effects were to be similar in magnitude to the familiar and substantial effects of growing up in income poverty. Researchers at University College London have found similar results; wealth matters for child development but doesn’t matter as much as an estimate of so-called ‘permanent’ (or average lifetime) income. However, unlike in the US, where researchers often found that particularly financial wealth bolsters child development, the researchers at University College London found a clear link with housing wealth in the UK. In addition, the Joseph Rowntree Foundation found a connection between anxiety and lacking assets appeared strong in the UK, and applied with comparable force irrespective of the form the assets took.

Innovative thinking is needed to change housing and people’s health

The current interest rate spike has brought a lot of pain for many homeowners and forced potential homebuyers to reconsider their ambitions. However, the high interest rates did not cause an almighty property crash and, therefore, the recent trend in renting and ownership is likely to continue. This means that a large proportion of the population is not building up any property stake during their working life and, according to the statistics, will inevitably have lower living standards.

How can we meet the demand for housing, ensuring properties do not have a negative impact on people’s well-being, and that those who want to buy are given the support and opportunity to do so? Building more homes – both social and those to be privately bought and lived in – is part of the solution, but other creative ideas are required. Is there a way to ensure long-term renters gain some portion of the equity in the property they live in or, at least, the right to purchase it on favourable terms? What can be done to encourage community-led housing, where affordable homes are owned and managed collectively by the community on a not-for-profit basis?

The evidence is clear and those looking to be elected on 4 July need to do more to make sure homeownership is achievable and that homes are suitable and do not have an adverse impact on people’s health.

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