In 1986, as the general election neared, the Conservatives organised a photo call to celebrate their biggest domestic achievement. Margaret Thatcher handed a delighted family in Aberdeen the keys of the millionth council house purchased under right-to-buy. The image symbolised a truism of modern British politics — expanding home ownership is good for society and good for politicians.

When Gordon Brown announced his national plan on Monday, most people would have turned off once he started talking about social housing: isn’t that just for poor people in the North? But in the wake of the credit crunch things are changing. More of us may be thinking about renting. Instead of being worried at the halt of the long march of home ownership, we should celebrate.

As Plato said, necessity is the mother of invention. The simplest and strongest reason to expect home ownership levels to flat-line or dip is that people can’t afford to buy — 125 per cent mortgages are history and, as an article recently pointed out on these pages: “If the average earner puts aside 5 per cent of take-home pay, it would take 35 years to save enough for a deposit on the average home.”

There are also signs that people’s preferences are changing. A recent survey by the Chartered Institute of Housing found that the number of 25 to 34-year-olds saying that home ownership was their favoured form of tenure had fallen significantly, and that began before the credit crunch.

We assume that a pick-up in the housing market is a sign of economic buoyancy. But rising levels of home ownership aren’t necessarily good for growth. Several studies have shown that it reduces labour mobility because people can’t be bothered with the stress of buying and selling to move to a new job.

Decades of boom-and-bust housing inflation have greatly increased social and intergenerational inequality. Many now sitting on a huge asset are also worried that their children or grandchildren will never afford a family home. In each property price cycle some make a killing while others are damaged by jumping on the ladder at the wrong time. Many local authorities have to deal with families who bought council flats but now cannot afford their share of essential repairs and renovations.

Because house price inflation has run well in excess of the rest of the economy, home ownership has provided good returns. Yet, arguably, bricks and mortar represent an inflexible form of investment for the individual and an unproductive one for the economy. An obsession with home ownership is bad for the environment. Millions live in inadequate housing in the UK, but there are a million empty homes; some being held empty by developers, others the second homes of the rich. And many millions more are half-empty, as people hang on to houses too big for their needs, assuming that this is bound, in the end, to be a good investment.

I’m not against owning. It’s a personal choice. But we should aim for parity of esteem between tenures. Homeowners feel more house-proud and have control over their property, but renting offers more flexibility and is much less hassle.

If the idea of parity seems impossible, think back to the 1950s when property prices were stagnant, millions more people rented and the chances of social mobility were just as good for council housing tenants as owners. But we won’t get parity because the housing market is in a dip and banks are being cautious. We must transform the experience of renting, in both the social and private sectors. The Government made a start this week, not only committing more investment to building social homes but also, at last, allowing councils to keep and reinvest receipts from council house rents and sales.

We also need new models of investment in private renting. Most private rented housing comprises single units on short-term leases. We need larger developments with shared facilities, such as gardens and gyms, and good estate management. These could be rented on secure five-year indexed leases. Some councils and developers are looking at models in which tenants sign up to such a lease and during its life a proportion of their rent goes towards the option of buying.

But the aim shouldn’t always be for people to move from renting to owning. It should be easier and less traumatic to go the other way. Another long-awaited government announcement concerns the future of social care. It is expected that a core proposal will be that when people retire they should put aside a lump sum (£12,000 is bandied about) as insurance for future long-term care. This would be much easier if older people were able to sell their homes and rent them back for a reasonable period. Instead of finding it harder and harder to cope with an oversized home only to pass the wealth on to their own aged offspring, they could go on a cruise.

Although home ownership has, in recent decades, risen across the developed world, few countries are quite as unhealthily obsessed as we are (America is certainly regretting its attempt to widen ownership to the poor). Surveys have found that many renters are happy with their homes, but feel that they are not full citizens until they own. We must change that. Some time ago, advertising agencies were asked to make renting sexy. One idea was a hoarding: “My old man’s a designer, he lives in a council flat, he wears Armani trousers and shops at Habitat.”

But one move above all would make housing tenure a matter of pragmatism and convenience, not a cause of anxiety and social segregation: the Government and the Bank of England should make clear their long-term intention to act decisively to deflate any future housing bubble. We should see our homes as places to live, not as a get-rich-quick scheme.

Matthew Taylor is chief executive of the RSA. He lives in a rented flat in South London

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