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Why there's no place like home when it comes to making money

Long ago, a little-known commentator put his finger on the heart of our housing problem. If we go on like this, he wrote (in the mid-1980s, when by 21st-century standards we barely knew what to 'go on like this' meant), houses would end up earning more money than the people living in them.

At the time, this was intended as a statement of the ridiculous but we now know it was a statement of the obvious to come. And now it has happened:

people's houses really are earning more than they do and, as a result, every householder has been turned into an untaxed, self-employed developer.

In this new situation, the production of new houses - which were numerous enough to act as the government's means of controlling the housing market as recently as the 1970s - has been overtaken by the tidal wave of transactions involving existing houses that nowadays outnumber new ones by a huge margin.

No one should doubt that this is a momentous issue in itself, but it is yesterday's issue.

We should no longer be allowed to forget that the century of owner occupation was the 20th. We are citizens of the 21st, the century of owner speculation, and in consequence our take on the housing problem is different.

For a start we are all experts now, not amateurs. We can no longer plead that we thought we were answering a deep call of human nature when we took out our first mortgages.

Now we have to admit that we were in it for the equity and the untaxed capital gain. Deep in our subconsciousness we have erased any lingering idea that our houses are primarily private places to eat, sleep and raise families.

If we still want that sort of anachronistic dwelling, we will have to fight to keep ourselves out of the housing market as did the 93,000 Birmingham council tenants who last month voted overwhelmingly against handing the running of their homes over to a new housing association - a step which they correctly saw as the first towards a privatisation deal of some sort, guaranteed to get them onto the street.

The true 21st-century house, trimmed for market combat, will, of course, resemble a 19th-century vicarage - like every other house in this country, new or old - although somewhat downsized and possibly constructed from blue kryptonite that automatically lights up at night. Nominally it will be a three-bedroom dwelling but in practice it will operate like a small hotel, run by a single householder with an offshore bank account but minimal furniture and the constant presence of tenants who pay cash and are constantly changing.

For their benefit, every room in the house, except bathrooms, will be kitted out with a bed, a currency dealer's workstation and an automatic teller machine.

In this way the traditionalism that disfigured so many of the chintzy houses of the owneroccupier era will give way - at least internally - to a rigorous functionality reflecting the fact that many of these houses will remain unoccupied for long periods and may be sold three or four times every year while their value increases.

In 1978, four times as many houses were sold as houses built. By 1988, 10 times. By 2008, perhaps 100 times as many will be sold or refinanced.

Nothing will stop it. Industry is finished and the oil is running out. We are a nation of speculators adjoining a continent of tenants just as surely as the Easter islanders were a statuary economy in the middle of the Pacific Ocean. Better get used to it.

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