Home truths about mortgages

EVERY generation has its pet economic fallacies. One of ours is the importance of home ownership.

The fact this has declined is widely, warmly and foolishly agreed to be a bad sign. But it isn’t.

The home-ownership obsession is a massive hindrance to the mobility of labour.

If you rent, you can move. The importance of a flexible workforce is shown by the scattered pattern of unemployment in the six regions of the country, with rates ranging from less than 2 per cent to more than 10 per cent.

If you are a homeowner, the barriers to moving are serious.

If you can get a job in a distant location, you must decide whether to accept after working out the sale price of your present home and the cost of a new one near your

andrew.alexander@dailymail.co.uk new work. This can be a prolonged, dreary and tricky business. The strong temptation is to stay put.

In the Thirties, most homes were rented. It was easy to move.

When you settled on a job, you then went to a local estate agent for a list of properties to rent and could find one easily.

The list was long because building or buying properties to rent was reckoned a safe investment, especially for the small investor.

Until, that is, rent controls were brought in when war broke out and not repealed for four decades because politicians saw more votes from protected tenants than landlords.

We paid a lot for that in economic terms. Now we are paying for the mortgage obsession. But no one seems to get the point.