The Locked Gate: How the West Priced Its Children Out of Existence

The average house in England now costs 8.9 times the average annual salary (ONS, 2024). In London, the ratio stretches to 13.5. In Sydney it is 13.3, in Vancouver 12.3, in Hong Kong a staggering 16.7 (Demographia, 2024). A young couple in Seoul must save every penny of both their salaries for eighteen years to afford a modest flat (Korea Housing Finance Corporation, 2023). These are not figures from some dystopian thought experiment. They are the present.

For most of the twentieth century, a house in Britain cost between three and four times the average income (Nationwide, 2023). A single earner — a teacher, a postman, a factory foreman — could reasonably expect to buy a home, raise a family, and retire with something to leave behind. That world has vanished so completely that describing it to someone under thirty feels like recounting the plot of a fairy tale.

The consequences are precisely what any student of history would predict. Every city in the developed world where housing costs have become extreme has a fertility rate below 1.5 children per woman — well beneath the 2.1 replacement threshold (OECD, 2024). Seoul, the most expensive major city on earth relative to incomes, recorded a total fertility rate of 0.72 in 2023 (Statistics Korea, 2024). Hong Kong managed 0.77. The entirety of Italy, where young adults cannot leave their parents’ homes until their mid-thirties, posted 1.20 (ISTAT, 2024). England and Wales came in at 1.49, the lowest figure since records began in 1938 (ONS, 2024).

The Romans, who understood a thing or two about the relationship between property and social collapse, would have found all of this rather familiar. Augustus himself tried to bribe citizens into having children with tax penalties for the childless and inheritance rewards for the fertile — the Lex Papia Poppaea of 9 AD. It worked about as well as modern baby bonuses, which is to say not at all (Treggiari, 1991). The Roman plebeians could not afford decent housing in the capital either, crammed as they were into rickety six-storey insulae while the patricians lounged in airy domus. Two thousand years of civilisational progress, and the fundamental complaint remains unchanged: the young cannot afford a home, and the old cannot understand why they are making such a fuss about it.

This is the story of how the West locked the gate to homeownership, and in doing so, priced its own children out of existence.

The Enclosure of the Modern World

The dispossession of ordinary people from land and shelter is not a modern invention. It is, in fact, one of the oldest and most reliable engines of social upheaval in human history.

Between 1750 and 1850, the English Enclosure Acts transformed the landscape of Britain more profoundly than any war. Through some four thousand individual Acts of Parliament, roughly 6.8 million acres of common land — roughly one-fifth of England’s total area — were parcelled off and handed to private owners (Mingay, 1997). The commoners who had farmed these strips for generations, growing food and grazing livestock, were told to leave. They had no legal title, no written deeds, no recourse. The hedgerows that sprang up across the English countryside in the late eighteenth century were not a charming rustic feature. They were walls.

The human cost was immense. E.P. Thompson described the enclosures as “a plain enough case of class robbery played according to the fair rules of property and law” (Thompson, 1963). Millions of rural families, stripped of access to the land that had sustained them, were forced into the burgeoning industrial cities — Manchester, Birmingham, Leeds — where they supplied the cheap labour that powered the Industrial Revolution. The enclosures did not merely redistribute property. They created a landless proletariat, and with it, the modern housing crisis.

Ireland offers an even starker illustration. By the 1870s, absentee English and Anglo-Irish landlords owned approximately 97 per cent of all Irish land (Donnelly, 2001). The tenants who actually worked the soil held no security of tenure and could be evicted at a landlord’s whim. The Irish Land War of 1879-1882, led by Michael Davitt and the Irish National Land League, was a direct response to this concentration. It was, at its core, a housing crisis with pitchforks.

The pattern recurs across civilisations. In the late Roman Republic, the latifundia system concentrated vast agricultural estates in the hands of senatorial families while dispossessing the small farmers who had once formed the backbone of Rome’s citizen-soldier army (Brunt, 1971). The Gracchi brothers, Tiberius and Gaius, attempted land reform in the 130s and 120s BC. Both were murdered for their trouble. The problem festered for another century until the Republic collapsed altogether.

John Hajnal, in his landmark 1965 study “European Marriage Patterns in Perspective,” identified a crucial demographic mechanism linking land access to family formation. West of a line running roughly from Saint Petersburg to Trieste — the so-called Hajnal line — Europeans had for centuries married later and in smaller proportions than populations to the east (Hajnal, 1965). The reason was property. In Western Europe, marriage was contingent on the couple’s ability to establish an independent household. No house, no marriage. No marriage, no children. The system was remarkably effective at regulating population, but it carried an implicit threat: make housing inaccessible, and the population simply stops growing.

This is precisely the mechanism operating today. The enclosure of the modern world is not accomplished with hedgerows and Acts of Parliament. It is accomplished with planning restrictions, leveraged buy-to-let portfolios, and a tax system that treats housing as an investment vehicle rather than a place to live. The result is the same. Land concentrates, access narrows, birth rates fall, and the social fabric begins to fray.

Why Housing Became Unaffordable

The causes of the modern housing crisis are multiple, reinforcing, and almost perfectly designed to resist correction. No single villain explains the problem, which is part of why it has proved so intractable.

The first cause is restrictive planning. In Britain, the 1947 Town and Country Planning Act and the subsequent creation of Green Belt land around major cities placed severe constraints on where new housing could be built. The Green Belt was a noble idea — preventing urban sprawl, preserving countryside, maintaining a distinction between town and country. But its practical effect has been to create an artificial scarcity of developable land that has persisted for nearly eight decades. Approximately 12.4 per cent of England’s land area is designated Green Belt, much of it neither green nor particularly beautiful — scrubby fields, disused car parks, land between motorway junctions (CPRE, 2023). Yet it remains sacrosanct. Any politician who suggests building on Green Belt land receives approximately the same reception as one who suggests abolishing Christmas.

NIMBYism — “Not In My Back Yard” — compounds the problem. Existing homeowners, who have a direct financial interest in restricting supply, form the most powerful political constituency in nearly every Western democracy. They attend planning meetings. They write to their MPs. They object to every proposed development on grounds of traffic, character, heritage, the skyline, the local primary school, and, when all else fails, the great crested newt. The system gives them an effective veto. In the United States, the situation is even more extreme: the median time to approve a new housing development in San Francisco exceeds four years (California Housing Partnership, 2023).

The second cause is the era of cheap money. Between 2009 and 2022, central banks across the developed world held interest rates at historically unprecedented lows. The intention was to stimulate economic recovery after the global financial crisis. The side effect was to inflate asset prices — and no asset inflated more spectacularly than housing. When money is nearly free to borrow, the rational response is to borrow as much of it as possible and buy property. Prices rose not because houses became more valuable in any material sense, but because the cost of financing their purchase fell to almost nothing. Between 2009 and 2022, UK house prices rose by 73 per cent in nominal terms while real wages grew by just 2 per cent (Halifax, 2023; ONS, 2023).

The third cause is the financialisation of housing. Over the past three decades, residential property has been progressively absorbed into the global financial system. Buy-to-let landlords, real estate investment trusts, sovereign wealth funds, and institutional investors now own vast swathes of what was once owner-occupied housing stock. In England, the private rented sector grew from 9 per cent of all households in 1991 to 19 per cent in 2021 (English Housing Survey, 2022). In London, nearly one in four homes is privately rented. Housing has become, in Thomas Piketty’s memorable formulation, the dominant form of capital in the twenty-first century — an asset whose returns consistently exceed the rate of economic growth, concentrating wealth in the hands of those who already own it (Piketty, 2013).

Foreign capital has amplified the effect. In Vancouver, London, Sydney, and Auckland, overseas buyers — many seeking safe havens for wealth accumulated elsewhere — have poured billions into residential property. Entire apartment blocks in central London sit largely empty, their units serving as safety deposit boxes in the sky rather than homes for families (Transparency International, 2015).

The fourth cause is demographic pressure. The UK’s population grew from 58.7 million in 1998 to 67.6 million in 2023 — an increase of nearly nine million people — while housebuilding consistently failed to keep pace (ONS, 2023). Net migration alone has averaged roughly 250,000 people per year over the past decade, each of them requiring somewhere to live. Simple arithmetic dictates that if demand grows faster than supply, prices rise. Yet housebuilding in England has not exceeded 250,000 completions in a single year since the 1970s (DLUHC, 2023).

The fifth cause is the failure of intergenerational wealth transfer. The traditional mechanism by which housing wealth passed down the generations — parents helping children onto the property ladder, or children inheriting a home upon their parents’ death — has been disrupted by rising life expectancy and the costs of elder care. Parents who might once have died in their seventies, leaving a house to their children, now live into their nineties and may require years of expensive residential care, consuming the very assets that would have funded their children’s deposits. The Bank of Mum and Dad, as Danny Dorling has observed, is increasingly a Bank of Mum and Dad’s Nursing Home (Dorling, 2014).

Each of these five causes reinforces the others. Restricted planning limits supply, cheap money inflates demand, financialisation treats the resulting scarcity as a profit opportunity, population growth compounds the pressure, and the breakdown of intergenerational transfer removes the traditional escape valve. The system is not broken. It is functioning precisely as designed — for the benefit of those who already own property, and to the detriment of those who do not.

The Demographic Mechanism

The link between housing costs and fertility is not speculative. It is one of the most extensively documented relationships in modern demography.

When young people cannot afford a home, they delay the milestones that historically precede childbearing: leaving the parental home, forming a stable partnership, and establishing an independent household. Each delay compresses the window of fertility. A woman who might have had her first child at twenty-five in 1980 now has it at thirty-one — if she has one at all (ONS, 2024). The biological arithmetic is unforgiving. Delaying a first birth by six years does not merely shift the schedule. It reduces the total number of children a couple can have, even if they want more.

Survey after survey confirms that housing is the primary obstacle. In the UK, a 2023 YouGov poll found that 42 per cent of adults aged 25-34 who wanted children but did not yet have them cited housing costs or insecurity as the main reason for delay (YouGov, 2023). In South Korea, a 2022 survey by the Korea Institute for Health and Social Affairs found that 73 per cent of unmarried young adults identified housing costs as a “major or decisive factor” in their decision not to marry or have children (KIHASA, 2022). In the United States, a 2018 New York Times/Morning Consult poll found that the top reason young Americans gave for having fewer children than they considered ideal was “child care is too expensive,” followed immediately by “worried about the economy” and “can’t afford more children” (NYT/Morning Consult, 2018). Housing pervades all three responses.

The mechanism Hajnal described in 1965 — no independent household, no marriage, no children — has not disappeared. It has intensified. In England and Wales, the mean age at first marriage has risen from 24.6 for women and 26.5 for men in 1971 to 32.1 and 34.1 respectively in 2020 (ONS, 2022). In South Korea, the mean age at first marriage for women reached 31.3 in 2022 — effectively at the outer edge of the window within which most women can comfortably conceive without medical intervention (Statistics Korea, 2023). Marriage rates themselves have fallen dramatically. In England and Wales, the marriage rate per thousand unmarried adults has declined from 74.9 in 1972 to 18.6 in 2019 — a fall of 75 per cent (ONS, 2022).

The pattern holds across the OECD. Countries with the highest housing cost burdens — measured as the share of disposable income spent on housing — have the lowest fertility rates. The correlation is remarkably tight. New Zealand, Australia, Canada, South Korea, and the United Kingdom all combine severely unaffordable housing with fertility rates between 1.2 and 1.6 (OECD, 2024). Conversely, countries that have maintained relatively affordable housing — France, the Nordic states, and until recently the United States — have sustained higher fertility rates, though even these are now falling as housing costs creep upward.

Japan is the instructive exception that proves the rule. Despite its reputation as a demographic basket case, Japan’s fertility rate of 1.20 in 2023 is actually higher than South Korea’s, Italy’s, or Spain’s (World Bank, 2024). One underappreciated reason is that Japan has, uniquely among developed nations, kept housing relatively affordable by building prolifically. Tokyo alone permitted more new housing starts in 2022 than the entire United Kingdom (Ministry of Land, Infrastructure, Transport and Tourism, 2023). Japanese zoning laws are set nationally rather than locally, depriving NIMBYs of their most potent weapon. The result is that while Japan faces many demographic challenges, housing cost is less prominent among them than in peer nations.

The demographic mechanism is not mysterious. It is the same one that operated in medieval England, in Hajnal’s Western European marriage pattern, and in every society where the cost of establishing a household has exceeded what young people can afford. The only difference is scale. Never before has the problem been so widespread, so acute, and so resistant to the policy interventions that governments have attempted.

Who Benefits?

If the housing crisis produces such visible harm — falling birth rates, declining social mobility, rising inequality, delayed adulthood — the natural question is why it persists. The answer, as with most entrenched injustices, is that it benefits powerful people.

Existing homeowners benefit directly. In England, approximately 64 per cent of households own their home, either outright or with a mortgage (English Housing Survey, 2022). For most of them, their house is by far their largest asset — often their only significant asset. Rising house prices make homeowners feel richer, even though the gain is largely illusory unless they intend to downsize or emigrate. The political implication is stark: no government that wishes to remain in power can afford to pursue policies that would cause house prices to fall. Margaret Thatcher understood this instinctively when she introduced Right to Buy in 1980, creating millions of new homeowner-voters with a direct stake in rising property values. Every subsequent administration has understood it too.

Landlords benefit. The number of buy-to-let mortgages in the UK grew from virtually zero in 1996 to 1.8 million by 2017 (UK Finance, 2018). Private landlords have extracted billions in rent from a generation that cannot afford to buy, while their properties appreciate in value. The returns are double-sided: income from rent and capital gains from appreciation, a combination that has made buy-to-let one of the most reliable wealth-generation strategies of the past quarter-century.

Banks benefit. Mortgage lending is the core profit engine of the British banking system. In 2023, UK mortgage debt stood at approximately 1.66 trillion pounds (Bank of England, 2024). Higher house prices mean larger mortgages, which mean greater interest income for lenders. The banking sector has no structural incentive to see house prices fall and every incentive to support policies that inflate them.

Governments benefit. In 2022-23, the UK government collected 11.7 billion pounds in stamp duty land tax and 4.7 billion in capital gains tax, much of it from property transactions (HMRC, 2023). Council tax, business rates on commercial property, and inheritance tax on estates further swell the Treasury’s coffers. Affordable housing would mean lower tax receipts. No Chancellor has ever enthusiastically embraced that trade-off.

The parallels with pre-revolutionary France are uncomfortable. Under the Ancien Regime, the French tax system was rigged to benefit the aristocracy and the Church — the two groups that owned the most land — while bearing most heavily on the peasantry, who owned the least. The gabelle, the taille, and the corvee fell disproportionately on those least able to pay, while the largest landowners enjoyed extensive exemptions (Doyle, 1989). The system persisted for generations because it suited the people with power to maintain it. When it finally broke, it broke catastrophically.

The modern Western housing market is not the Ancien Regime. Nobody is storming the Bastille over stamp duty. But the underlying political economy is structurally similar: a system that transfers wealth from the asset-poor to the asset-rich, defended by the very institutions that profit from it, and insulated from reform by the electoral power of those who benefit. The young, who bear the costs, are the least likely to vote and the least likely to own property. The old, who reap the benefits, are the most likely to vote and the most likely to own a home. The political incentives are precisely backwards.

Danny Dorling put it with characteristic bluntness: “The housing crisis is not a crisis for those who own houses” (Dorling, 2014). He is right. And until the political calculus changes — until the costs of demographic decline become more frightening to governments than the costs of falling house prices — it will remain this way.

The Gate Can Be Unlocked

The curious thing about the housing crisis is that solutions exist. They are not theoretical. They have been implemented, at scale, in living memory.

Japan, as noted above, chose to build. By centralising zoning decisions at the national level and allowing development across metropolitan areas, Japan kept housing affordable despite extraordinary urbanisation. Tokyo is one of the largest cities on earth, yet its housing costs relative to incomes are lower than those of London, Sydney, Vancouver, or San Francisco (Demographia, 2024). The Japanese approach is not ideologically exotic. It is simply what happens when governments prioritise housing supply over housing wealth.

Vienna has pursued a different model with equal success. Approximately 60 per cent of Vienna’s residents live in subsidised or municipally owned housing, a legacy of the city’s “Red Vienna” social housing programme that began in the 1920s and continues to this day (City of Vienna, 2023). The Gemeindebauten — the municipal housing blocks — are not grim towers of deprivation. They are well-maintained, architecturally respected, and socially mixed. A Viennese teacher or nurse can afford to live in the city centre. A London teacher or nurse cannot.

Singapore’s Housing and Development Board system demonstrates perhaps the most comprehensive solution. The HDB builds, owns, and manages public housing for approximately 80 per cent of Singapore’s resident population (HDB, 2024). Flats are sold on 99-year leases at subsidised prices, with generous grants for first-time buyers and young married couples. The system explicitly links housing policy to family formation, with priority allocation for married couples and families with children. Singapore’s fertility rate, at 1.04 in 2023, remains low — but its housing costs relative to incomes are far more manageable than those of comparable Asian cities, and the government has a direct policy lever to adjust (Department of Statistics Singapore, 2024).

The solutions share a common feature: they all require existing homeowners to accept that housing cannot simultaneously be affordable for the young and an ever-appreciating investment for the old. This is the core trade-off that every Western government has so far refused to confront. House prices can rise, or birth rates can recover. They cannot both happen at once.

The Romans never solved their housing crisis. The insulae grew taller and more dangerous, the plebeians grew angrier, and the Republic gave way to an Empire that papered over social dysfunction with bread and circuses. The Gracchi’s reforms were blocked by a senatorial class that preferred short-term wealth preservation over long-term social stability. The result was not revolution but slow demographic and institutional decay — a hollowing out that took centuries but proved irreversible.

The West is not Rome. But the mechanism is the same. When a society prices its young out of housing, it prices them out of family formation, and it prices itself out of a future. The gate is locked, and the keys are in the pockets of those who have no incentive to turn them. The question is not whether the gate can be opened — Vienna, Tokyo, and Singapore have demonstrated that it can. The question is whether Western democracies will choose to open it before the demographic arithmetic becomes impossible to reverse. The actuarial tables are patient, but they are not forgiving. And unlike the Romans, we cannot say we were not warned.