In 1912, an Italian statistician transformed how we measure inequality. Corrado Gini was hardly a mathematical prodigy as a young boy, but at just 28 years old, the work he published became the Gini coefficient.
The Gini coefficient measures inequality on a scale between zero and one. Zero represents complete equality and one complete inequality. Today, the UK’s Gini coefficient is 0.33. In the 1970s it was 0.26, when Britain was at its most equal. In the decades that followed, wealth became progressively more unevenly distributed. But why?
In the 1980s, millions of families benefited from rising property values. The problem wasn’t the wealth housing created; it was that house prices became disconnected from earnings. As the stock of council housing declined through Right to Buy, access to one of Britain’s greatest creators of personal wealth became increasingly restricted. Each generation found it harder to get onto the housing ladder.
In the UK, property accounts for around 40 per cent of all household wealth, considerably more than in countries such as the United States. Home ownership in the UK has allowed ordinary households to build wealth through one of life’s most basic needs.
But, as house prices have risen faster than incomes, home ownership has become harder to access. In other words, unless it is balanced, home ownership can create wealth or inequality. So could a new generation of council houses be a mechanism to add that balance?
Recently, our new Prime Minister, Andy Burnham, declared he wants to deliver ‘the biggest council house building programme since the post-war period’. I hope this means that the government will take responsibility for the full cost of providing homes again, rather than simply subsidising a system that still has to make the numbers work.
The original council housing model was one of the greatest social reforms
The original council housing model was one of the greatest social reforms. It was not about creating wealth; it was about creating a more equal society. It moved millions of people out of slums and overcrowded housing into safe, affordable homes, providing families with security and stability. Alongside universal healthcare and a welfare state funded through progressive taxation, it helped make Britain a more equal society and set the standard for how countries could move from inequality towards equality.
But what would a council housing system designed for the 21st century look like? We need a system that provides access to a housing journey and its benefits, allowing people to rent, buy, upsize, downsize and relocate as their circumstances change without restricting opportunities for the next generation.
For that to work, government must provide and maintain a range of housing types and tenures, creating genuine housing mobility rather than simply access to home ownership for a single generation.
As the private market continues to struggle to deliver homes affordably, a new council housing system could work alongside it. Projects like Archio’s Citizens House in south London (pictured) demonstrate that house prices can be linked to local wages.
Their limitation is that they exist in isolation. Once people outgrow them, where do they go? The challenge for Burnham is not to replicate Citizens House, but to scale its underlying principle into a complete housing journey. That’s the secret sauce.
Linking house prices to wages isn’t enough. We need a complete housing system where people can live in well-designed homes, have access to nature, be part of thriving communities and access the wealth-building opportunities that home ownership offers. A system where secure, affordable renting and home ownership are not competing ideas, but different stages of a housing journey.
This new system would drive a more equal society, with architecture helping to widen access to education, nature, housing, community, wellbeing and home ownership. However, as I argued in a previous column, there is nothing affordable about building housing in the UK, so government needs to step in. It can’t all be left to the private sector. Council housing – the very phrase isn’t just about housing; it’s about responsibility. If Burnham is saying that government should take responsibility for housing people again, then I think that’s a very good place to start.
But the problem is obvious: how much is this going to cost? How do we pay for this and who pays for it? It won’t be cheap and it won’t be easy. But we can’t keep allowing money to be the reason we don’t give people the housing they need.
A Gini coefficient of zero may be impossible, but that doesn’t mean we should stop aiming for a truly equal society.
Kunle Barker is a property expert, journalist and broadcaster
