In the summer of 1994 I was looking for a flat to buy in Crouch End, north London. It was then a neighbourhood not so much up-and-coming as one that hid itself on the map, a bus-ride from Finsbury Park, the nearest tube station, and popular with people who didn’t have to endure the daily commuting life. Corner shop windows bristled with those little tear-off paper tags with the phone numbers of local psychotherapists and aromatherapy masseurs. The bookshop window displayed the novels of local authors – my own first novel would soon join them. I was single, self-employed, didn’t have children, worked from home writing for the broadsheets and had one published book behind me and another on the way. I didn’t care about gardens, access to schools, or transport links, I just wanted a good size second bedroom to write in. Working at home all day, I had a tendency to feel claustrophobic so I needed good light. I like looking out of the window. Before the internet, I could do it for hours.

I went round all the estate agents gathering details until one of them handed me a single page and said, “You want this.” It was a three-bedroom maisonette in an end-of-terrace house whose next-door neighbours were a Jamaican family who owned a shoe repair shop. The conversion of the house had been done in the 1970s by earlier owners (music teachers) who had made a granny flat on the ground floor and annexed the garden. The upper flat, the larger part of the building, had a roof terrace over the ground-floor kitchen extension. Each room was separated from the next by a flight of stairs. As a floor plan it was quite weird. And it was very run-down. Artex swirled across the ceilings as if it were a Cypriot taverna, embossed wallpaper peeled away from the dried-up paste hiding dodgy plaster, the nubs of the old gas mantels poked through the walls and the chimney breast still jutted out into the kitchen.

The flat had gone on the market the previous year for £110,000 and had found no takers. Withdrawn, it came hopefully back on again the following spring at £98,000 and three months later it had not received a single offer. I didn’t need a third bedroom, but no one else seemed to want it. I offered £92,000 and was accepted. After I moved in I asked the estate agent why there had been so little interest. Was I the sucker who couldn’t see what everyone else could? “It’s three bedrooms,” he said, “so normally we’d market it to a family, but a family wants a garden, and this just has a roof terrace. It’s an awkward property.”

The history of Crouch End is a microcosm of the patterns of owner-occupation and private renting in the last century, where shifts in market forces, population movement and changing government policy have left their mark. Built up at the end of the 19th century to provide large family homes for white-collar workers travelling to the City on the new railway, by the 1930s those homes were being turned into lodging houses, places for single tenants to watch the rain, listen to the mice scuttle, and hang themselves from the ornamental ceiling rose. A couple of decades after the war, Crouch End had become bedsit land, letting to students at Hornsey College of Art and the Mountview Theatre School. The Tory government elected in 1979 dramatically altered the condition of the area. Margaret Thatcher’s policy of turning Britain into a “property-owning democracy” released the mortgage market from its state-controlled bondage, allowing banks and building societies to decide how much they wanted to lend and to whom, without government interference. Developers rushed in, transforming the squalid bedsits into two- and three-bedroom flats with the then ultimate in mod-cons – central heating. It remained mixed, full of small-business owning Cypriots, but the middle classes had started to return, young families who wanted access to schools and parks. Crouch End was known as the place you went to if you were priced out of Highgate and Hampstead and liked what estate agents were starting to call “original features”. I got there as it was rising.

The flat in Crouch End, north London that Linda Grant bought for £92,000 in 1994 and sold for £660,000 last year. Photograph: David Levene for the Guardian

When I tell people now in their early 30s, trying to buy their own home, how much I paid for that flat and how much I sold it for a year ago, their faces go a bit sharp and angry and defeated. People of my generation have ridden successive waves of change in the history of renting and buying in this country and come out on top. Born in the postwar era when governments of all political parties were committed to a programme of state-funded house-building and slum clearance, we got the good-quality council houses, were handed the opportunity to buy them at a heavy discount or bought run-down houses and did them up ourselves, made money out of them through rising prices, huge sums in some cases, and then traded down with enough left over to buy up great chunks of the housing stock as buy-to-lets, putting them beyond the reach of anyone who didn’t already have their own stock of equity. Over the next two decades the flat, which I thought of as my home, would function independently as a commodity in the market place. It’s one of capitalism’s little mysteries, like hedge funds and short-selling. I did not understand how a Tory government committed to home ownership, almost the founding principle of Thatcherism, could oversee house price rises that cut off access to first-time buyers. Meanwhile, my generation, those of us who started buying our first properties in the 1970s and 1980s, if we bought in the right place, that is London and the south-east, have had an invisible enchanted cloak billowing around us, making us money. My own property history demonstrates how it happened.

The story really begins in the postwar period. I grew up in the 1950s in what Thatcher would later want for the whole country, a three-bedroom interwar semi on Williton Road, a quiet suburban cul-de-sac in Liverpool. It had front and back gardens with a swing, rose bushes, a rockery of glittery stone and alpine plants, a garage, and an outside coal-shed. A row of Toby jugs grinned and grimaced from an ornament rail in the hall. Groceries were delivered and a horse-drawn fruit and veg cart called along the road weekly. My grandparents were immigrants from eastern Europe whose children seized on the golden ticket of social mobility. The street my mother grew up on in the city centre was torn down after the war and no longer exists on the map. (“What Hitler started the Corporation finished,” was the city’s motto.)

In 1953, only 35% of the population of the UK were owner-occupiers, 19% were council tenants and 47% private renters. Much of the pre-1919 housing stock that had survived the blitz was in extremely poor condition, most with outside toilets and no bath. Leaseholds started in the 1850s had five or 10 years left to run, the property was unsellable, no one would repair it. Early Victorian porticoed mansions in Notting Hill sold at auction for as little as £5 to slum landlords. In 1949 it was estimated that around 2 million homes were unfit for human habitation, too expensive to repair and earmarked for demolition. In the postwar era of centralised planning the solution was to knock down and rebuild, to construct millions of houses and flats for long-term rent from local authorities. No one was interested in period features. They wanted indoor bathrooms and modern cookers.

The anonymous blogger, Municipal Dreams, documents and celebrates the vision of those municipal housing planners, drawing on council archives and accounts from local historians. They told me in an email that there was cross-party postwar agreement that the state would take on the main responsibility for housing: “In 1942, Beveridge identified squalor as one of the five giant evils to be vanquished in victory and council housing became central to the new world envisaged by both major parties. To Labour, it would be part of the ‘living tapestry of a mixed community’ – in Nye Bevan’s poetic idiom. To the Conservative government in 1951, it was the first of the social services. The central role of the state in meeting the nation’s housing needs was unquestioned.” The private rented sector began a decline from which it would not begin to recover until the mid-1990s.

The house in Liverpool where Linda Grant grew up. Photograph: Christopher Thomond for the Guardian

I don’t know how much my parents paid for their home but in 1955 the average house price for the whole country was £1,891. According to the property website Zoopla, the most recent sale on Williton Road, the house next door, sold for £215,000 in 2011 and now has an estimated value of £247,000. In 1959, we moved to a larger, detached house, a new-build on Booker Avenue with kitchen, morning room, dining room, lounge and oil-fired central heating. I was the first person I knew of at school who lived in a centrally-heated house. Middle-class housewives still got up in the morning early to lay the coal fire and warmed icy lounges with two-bar electric fires. We had a Formica breakfast bar in the kitchen at which you perched on high plastic-covered stools like an American diner, a washing machine which replaced the iron mangle my mother had heaved through its revolutions in the garage, and a modern marvel: a dishwasher.

From these luxurious circumstances, I went to the University of York in 1972, a 1960s concrete campus, and moved in to what was left of the pre-1919 houses which hadn’t been knocked down. This stock was so poor that you could only rent it to students. By the 1960s, the programme of mass demolition had been replaced by refurbishment and renewal and we were surrounded by derelict houses, boarded up and waiting for redevelopment. Savvy students persuaded their parents to buy one for the duration of their degree course – they cost as little as £800. Four of us squeezed into a rented house on Charlton Street, a small three-bedroom end-of-terrace, with what had been the front parlour turned into my bedroom. The conditions were squalid. A bathroom extension had been added behind the kitchen, heavy with condensation. Lines of huge mottled blackish slugs came through gaps in the ceiling and made their way down the walls. At night you arranged your clothes around the two-bar electric fire and in the morning, after lighting a cigarette to warm your hands, you steeled yourself to run across the room to turn it on, retreating back to bed to wait for the room to heat up. Sex was a form of frostbite protection.

There was no fridge. When the internal temperature rose a little we would put the milk bottles on a shaded window ledge to keep cool. Some houses were so antiquated they had no electric sockets. You plugged in your record player via an adaptor to the overhead light and the wires trailed down from the ceiling. Furnished flats came with wartime utility furniture, cheap government-designed beds and wardrobes and chests of drawers that no one else wanted. Everything was brown. I think we paid around £8 a week for the whole house. If there was a phone (we didn’t have one), it was coin-operated and screwed in to the wall in the freezing hall. If you wanted to get hold of someone you called round in person. If that wasn’t viable, you wrote them a letter and posted it.

When it was last sold, in April 2014, the price for our student house was £205,000. The bathroom is still off the kitchen but otherwise the whole place is unrecognisable. The front and back rooms have been knocked through, a slate floor has been laid in what is now a dining room and the rank weed-ridden backyard is a smart patio garden. The house was evidently purchased as a buy-to-let because it was advertised for rent immediately after the sale, at £795 a month.

The student house in York that was worth about £800 in the early 1970s. Last year it sold for £205,000. Photograph: Christopher Thomond for the Guardian

After graduating in 1975, I moved briefly from Liverpool to London. The idea I had about where people lived in London derived entirely from literature. In her 1963 novel A Summer Birdcage, Margaret Drabble’s narrator Sarah describes a “loathsome flat” in the King’s Road, Chelsea, and an “unspeakably sordid” place in Highgate. She and a friend draw ever-widening circles on the map of London indicating areas they can’t bear to live outside and eventually find a flat in Highbury in “a large decayed Victorian house … the rooms … vast and gracious, with ceilings covered with moulded fruit and flowers.” It was this generation, born in the 1930s, the young, educated new middle classes who began to gentrify places such as Islington. By the time my friends and I arrived in the mid-1970s in the middle of a recession, Hampstead, Highgate and Highbury were neighbourhoods we had heard of but couldn’t afford to live unless you could get a council flat (which was possible because there were so many of them, particularly for single people in officially-designated “hard-to-lets”, usually on the top floor of tower blocks). I would walk round London with an A-Z in my hand navigating the terra incognita of Vauxhall, Stockwell, Kilburn and – far out beyond the rim of the known world – Hackney, a part of London my mother designated as where you came from, not where you went to.

Many of the deteriorated Victorian and Edwardian houses had been compulsorily purchased by local authorities for regeneration but still lay empty and waiting for councils to raise the cash to repair them. Into this gap the squatters swarmed, homeless, mainly young single people, breaking in to empty properties and living in them until the police arrived. Often they made improvements, reglazing broken windows, replacing missing floorboards and handrails on the stairs. Local authorities took what we thought were vicious steps to repel squatters, putting cement down toilets or ripping them out altogether, but if you could access a property it became possible to do a deal with the council and become a licensed squat, permitted to stay there, often for years. I remember my friends’ squats in Newington Green and Dalston: poverty, shops where you could buy a single cigarette, the smell of damp and rot.

I went to Canada in the autumn of 1976 to do an MA and did not return until 1984, when the poisoning of UK housing really began. When I left the country, you had to open an account with a building society for the sole purpose of saving for a mortgage and join the waiting list for one. The government controlled the supply of mortgage money. It imposed rigid rules on all aspects of banking designed to prevent the banks taking on excessive risks in mortgage lending. When the banking sector was deregulated in 1986, freeing them from state control and allowing building societies to operate as banks, the mortgage market became massively competitive. Banks and former building societies were inventive about funding the demand for home ownership, while council tenants were offered huge discounts to buy the homes they rented.

My sister and her partner, both working for Hackney council in the housing department and press office, had bought a four-bedroom house in Lower Clapton for £42,000 in 1984 and that was where I lived for a few months after I returned from Canada. The house had coal-fired central heating too expensive to operate and during the miners’ strike we warmed ourselves round the living room’s only hot-spot, the baby, whom we surrounded with electric fires and space heaters. All along the road of Victorian terraces you could see through the windows young people painting and decorating, ripping out net curtains and replacing them with blinds (the 1980s means of measuring gentrification), taking up the carpets and stripping the floors back to the pine, knocking through walls, covering brown paint with builders’ Magnolia. In 1985 interest rates were 15%, there was nothing left over to spend on meals out in restaurants or holidays and in Hackney there was only one wine bar anyway (aptly called the Oasis) but you would have been nuts not to buy, there was no prudence at all in waiting. The banks were running towards you with money in their hands.

The two-bed flat between Brixton and Herne Hill, south London was bought in 1985 for £32,750 and sold in 1994 for £57,000. Photograph: Martin Godwin

Personally, I never liked Hackney. I thought it would always be a doomed poor relation of Islington and the transport links were appalling. (Today, similar sized properties on the road my sister lived are worth around £850,000; entry level council salaries are around £18,000). Within a few months I had bought my first flat. It was on Dulwich Road between Brixton and Herne Hill, with a shared garden leading down to Brockwell Park. I paid £32,750 for it, which was three times my salary as a communications officer for Age Concern Lambeth, minus £250. A mortgage broker arranged it for me. No one even mentioned a deposit. The flat was what estate agents called an “unsympathetic conversion” – the room at the front had a large bay window, a third of which had been sliced off to make a tiny, corridor-like second bedroom. The value went up to £83,000 for a few months in 1987 but then slid back down again after the crash of 1988 that trapped many homeowners in negative equity, unable to sell because they owed more on the property than it was worth. The desperation not to be locked out of the housing market had reached such extremes that in the years before the crash, friends and even acquaintances had taken out joint mortgages and were stuck together for years. I sold my Herne Hill flat with some difficulty in 1994 for £57,000 and bought the flat in Crouch End. By then home ownership was so much the norm that the private rented sector had shrivelled back to just 10%. No one rented unless they had to.

After 2002, when even London property sales slowed, people complained they couldn’t sell, but every time my flat was valued, it was worth more than the last time. The population of London rose too. Since 2001 it has increased in Greater London by 900,000, or 12%, and growth is speeding up: since 2008 the population has grown by more than 100,000 a year. Where is the growing population living? Between the 1950s and the 1970s, Britain was building 280,000 new homes a year, mainly in the public sector. When, in 1984, the Thatcher government offered council tenants the right to buy their homes at a discounted price, local authorities were forbidden to use the money from the sales to build more housing. Over the next 30 years, the population was growing, house building was declining and at the same time the number of households was increasing as household size got smaller (people were having fewer children, more households were splitting up, more single people were marrying later or not at all and more elderly people were living alone).

Local authorities were forbidden to use the money from the sales of council homes to build more housing

As council homes were added to the stock of housing for sale, from the 1990s on, a huge chunk of property was being removed from the owner-occupier market. Buy-to-let became a solid investment, the result of a combination of rising equity, easy mortgage access, pitifully low interest rates on savings and the poor performance of many private pensions. Landlords gained a huge advantage in the housing market with less strict mortgage rules and access to interest-only loans (which first-time buyers can no longer get). I borrowed against my mortgage to purchase a buy-to-let, two-bedroom terraced house in Chester for £115,000, a decision which, when I came to sell it 10 years later, illustrated in the starkest possible terms the huge discrepancies between the London and south-east property markets and the rest of the UK.

I lived in the Crouch End flat I bought in 1994 longer than I have lived anywhere, including my childhood homes. It formed the central block of my life between my early 40s and my early 60s. It’s where I wrote millions of words. Nine books were hammered out on different keyboards. I bashed away at hundreds of pieces for newspapers, kept piles of cuttings of my work in boxes until eventually they became infested with moths and I threw them out. I put people up in the spare room I’d never really needed, clearing a path for guests between piles of stuff, often technologically defunct stuff. All this time in the back of my mind, I thought, “are you ever going to be able to sell this?” and that occasional pinprick of anxiety recurred until the summer of 2013 when I put the flat on the market. I was moving because the stairs-connecting-every-room, the bathroom two floors away from the bedroom, had ceased to feel charming and had become a spectre to torment my coming old age. I was 62. Once, I fell down the stairs carrying a tray of wine glasses from the living room to the kitchen. People I knew were already having knees and hips replaced. How would I cope on crutches? Another reason was financial. I assumed that the flat was worth far more money than I’d paid for it. I wanted to release some cash because like so many people of my age who started paying in to private pensions in the 1980s, the optimistic promises of a retirement income of £30,000 a year had proved to be a chimera. In the words of my financial adviser, my pensions were “dead dogs”.

A new estate agent had moved into the neighbourhood and had sold the flat below mine in record time a few months earlier. I got him round to do a valuation. “I think it could be quite hard to sell,” I said. He stared at me with such bewilderment and startled surprise that I felt we might have to start the whole conversation again with an interpreter (he was French). “Why do you think this?” he said. “It’s three bedrooms so it’s really a family flat but it doesn’t have a garden. Wouldn’t a family want a garden?” “Of course they want a garden. But they can’t have one. Not at this price.” He valued the flat at £625,000, “a little low to get as many prospective buyers in as we can”. This figure sent me into shock. I could barely breathe. It went on sale on 14 September 2013. There were 27 viewings that day followed by six offers on Monday and by Tuesday afternoon it had sold for £660,000 to a man who worked for a US company that sold software to investment banks. He’d split up from his wife and wanted two bedrooms for when his children came to stay.

Of course they want a garden flat. But they can't have one. Not at this price North London estate agent

I then had to find a two-bedroom flat to buy. Nineteen years ago I’d collected sheaves of estate agents’ details and piled them into Yes, No, Maybe. Now, when I went in to register the agents looked up in hope that I’d come to offer my property for sale, then collapsed in a disappointed slouch. “Two-bedroom flat? Nothing to offer you at the moment, I’m afraid. I can put you on the waiting list.” One told me: “If you’re not selling through us, we owe you nothing.” Everything that came on the market, the little there was, was selling for more than the asking price, but there was hardly anything to view.

A few weeks later I went to an open day of a flat in a small purpose-built block on a road a few minutes walk away which, according to the paperwork which came with it, had been built over two bombed houses in 1951. It was on the first floor and had access down a flight of external wobbly wooden steps to a shared garden. The estate agent told me he’d priced it low at £415,000 because it wasn’t a period property “and people come to Crouch End for period features”. It attracted 47 viewings, multiple offers and I got it for £445,000. I was in a supreme position as a buyer: the person buying my flat had nothing to sell so there was no chain of house sales below me, and I was buying this flat with the cash from that sale so there was no need for a mortgage, which would have complicated matters. Part of what was driving up prices was desperation. My solicitor showed me a floor covered in files, for clients who had received offers on their own property, thwarted over and over again in their attempts to find somewhere to buy, always being beaten by higher bids, or cash buyers.

With the money from the sale of the house in Chester and what was left over from the sale of my flat, I wanted to buy a two-bedroom flat for my nephew and his wife (he was the baby we had warmed our hands round during the bitter cold of the miners’ strike). Aged 30 and 25, married 18 months ago and jointly earning well above the national average of £22,000 a year, they should by now be paying their first mortgage, as his parents were doing at their age. Instead they were renting. A chart published in January by the Guardian shows that the price of a property is now nine times greater than the earnings of first-time buyers in London. My plan was to rent the flat to them for as long as they needed it at less than market value to allow them to save for a deposit and shelter them from the ruthless landlords who were terminating tenancies in order to make superficial improvements and raise the rent. I calculated I would have £250,000 to spend. But the sale of the house in Chester was held up for several months by a freak accident, a burst water main under the foundations which flooded the ground floor and made it uninhabitable. By the time I sold it for £153,000 in June last year, the London market had raced ahead of my quarter of a million pounds. My nephew and his wife wanted, not unreasonably, fast transport links to central London and the City where they work, a nice safe road and good schools for the family they hope to start but London house prices had outstripped my capacity to deliver any of that. The whole plan failed. A few months later I bought a flat in Brighton already rented by a young couple in much the same position, unable to buy, constantly at the mercy of short-term tenancies. I’ve told them they can stay as long as they like. My nephew and his wife found somewhere nice to rent in north London, far nicer than anything I could have afforded to buy, and have stopped talking about becoming owner-occupiers.

If houses are in such short supply, why aren’t we building more? There’s no single reason for this. It’s a combination of restrictive planning laws, developers sitting on land and releasing it only in small parcels to maintain the high price (a practise known as land-banking), the lack of available land and the objections of local residents to development. The babyboomers are a large generation which needed housing, who gobbled up the available supply then fragmented into smaller units by having smaller families, by staying single and by becoming longer-lived pensioners.

While I have lived here, the skyline of London has altered beyond recognition. At night the towers turn red, hectic, throbbing with a demonic glow that takes my breath away. And through the window of the office of my new flat I can see the Shard framed in a gap between two 1930s mansion blocks. In the foreground lie the squat-tiled roofs of Victorian terraces which were once the half-blitzed house, the yards with outside privies, the run-down first purchases of my generation, and now for taxation purposes many designated as mansions.

People of my age have ridden the wave of change in postwar housing and largely come out on top. Our advantage is immense. In the block of flats where I now live and write, only two are owner-occupied. Across the hall a single woman, a manager in the charity sector who rents out her flat in Sheffield, said she could not imagine ever earning enough to buy in London. Next door the young couple with the six-year-old can’t see how they can save for a deposit while paying London rents. The single parent on the ground floor lost the family home when she separated from her husband. The newest arrivals with the newborn baby have measured the catchment area to the nearest school. They are planted. “Bricks and mortar,” cried my father, “always put your money in bricks and mortar.” That his grandson is unable to do so would have been unfathomable to him.

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