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Parent Category: 18th Century History Articles
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Property is one of the most significant investments that most of us will make in our lifetime. For many millennials, the possibility of homeownership is proving to be a less attainable goal than in generations previously. Particularly in the last few decades property values have skyrocketed, and income has not risen to match this.   

But let’s look back further than just a single generation. How has the land ownership situation changed since the 18th century? What were the intentions of purchasing land, and what considerations did landlords take into account when buying and managing their property investments?

 

It can be revealing what elements have impacted the shape of property ownership over the course of centuries. The activities caused by our development through the industrial revolution onward have been instrumental in affecting society’s view on the property not just as homes but as assets. On our journey to the present the property situation, we’ll take a look at a few of the contributing factors, and the challenges that have inspired change.  

Changing Industries

The activities of the 18th century were a catalyst to immense change in production, consumption, and our way of life in general. We may refer to it as the industrial revolution but it, in effect, paved the way for the evolution of our work and life that continues to this day, resulting in the digital age we currently benefit from. This, of course, had a significant impact on the development of property values.

 

Between the years of 1700 and 1775, the output of the 13 colonies that would eventually form the U.S. grew significantly. Economic experts now estimate that, prior to independence, per-capita income may have been as much as 52% higher than their counterparts in the UK.   Though, the resource also states that this may have dropped by 30% due to the hardships of the Revolutionary War. During this time, homeownership was still relatively unusual, though the industrial revolution made it more likely for those in urban areas to purchase property. The final decade of the 18th century saw the first mechanized textile industries emerge, with technological methods expanding to agriculture in the 19th century. These industrial advances helped to create a new class system which resulted in a greater likelihood of homeownership for even average people. Though by 1890, property ownership in the US was still limited to just 47.8% of the population.

 

Changes in the economy are often reflected by the value of property in those areas. The rise of industry was instrumental in the development of cities and large towns, and as the economy grew, so too did the demand for homes and commercial buildings. As the previous resource states, the link between the economic rise and an uptick in home value is often due to consumer confidence growing as a result of seeing evidence of a strong economy, which` results in greater expenditure and investment in properties.

Migration

When looking at how the value of property has developed over a period of time, one of the most useful metrics to look at is the movement of people. A significant amount of the success of the U.S. can be attributed to migration and immigration; people have flocked to this country, bringing with them a diverse range of skills and expertise that have made the contents of America’s cultural melting pot richer. The more people arriving in a location means more demand for housing, driving purchases in real estate for both personal use, and investments. 

 

It’s difficult to gauge how initial migration to the colonies in the 1700s drove property prices, as the simple fact is that property usually wasn’t sold as it belonged to the crown. In fact, it wasn’t until 1785 that farmers were given the right to purchase tracts of land, helping to build the first townships. There was something of a lull in the early part of the 19th century, but by the 1850s there was a huge boom in Irish immigration as a result of the potato famine, resulting in a greater demand for housing in the New York area — however, this resulted in the rise of cheap, often unsafe tenement housing, generally occupied by several families.

 

Today, there is evidence to suggest that immigration has a positive effect on house prices, at least for those who already own homes. A recent study suggests that immigration — whether legal or illegal — tends to increase property prices by $0.14 per immigrant in metro areas. However, as we start to see the effects of climate change, we have to consider whether the necessity to migrate to less detrimentally affected areas could drive up demand, and prices, to an unsustainable level.

Property as Industry and Investment

We’ve come a long way since homeownership was a simple case of finding a patch of land and building shelter. In assessing the development of property value over the last few hundred years, we can’t just look at the cost of bricks and mortar, but also what property has come to represent. For some people, purchasing property provides security in ownership. For others, buying property is a matter of investment. The emergence of property ownership as an industry has greatly affected the shifts in financial value.

 

In the 1700s, it was almost unheard of to purchase a home for oneself, let alone as a buy-to-rent investment or part of a portfolio. In fact, obtaining land in 18th century England was not the simple financial transaction it is today. It was subject to a symbolic gesture known as the livery of seisin, which confirmed the transfer of titles from landlord to tenant. It wasn’t until the early 1900s that the first mortgages for property ownership began to be introduced. With this grew the potential for savvy buyers to purchase land and houses for investment as well as their own use.

 

In 2018, approximately one in five home purchases in the U.S. were undertaken by real estate investors or similar entities. The rise of real estate as an industry has transformed our housing environment and has even resulted in the development of new avenues of employment. Experts in real estate analysis and finance have become valuable assets. While this represents a healthy state of affairs for those selling their homes, it is certainly problematic for millennials attempting to get on the property ladder. Most young potential buyers do not have the capital to match investors who are able to pay premium prices, which can often set a precedent for values of other houses in similar areas. Though we live in vastly different times, it seems as though citizens of the 1700s and today face a similar struggle — land is of such high value that it is primarily those of significant income who have a realistic opportunity to own a home.

Conclusion

The fact that the prices of property have changed in the last 300 years is a given. However, it’s important to note that the reasons for its rise are a matter of socio-economic importance. By understanding the changing ways in which we utilize real estate and the factors that impact its costs, it’s possible that we’ll be able to better predict where property value is heading in the future.