Housing is more than a purchase you make or a service you buy. It’s fundamental to how people live, how secure they feel and their sense of achievement and self-respect. It directly affects the health, wellbeing and education of their children, and their sense of being rooted in a community.
And now, more than perhaps ever before, home ownership feels increasingly unattainable, and housing insecure. Official figures reveal that just under 63 per cent of UK households are owner-occupiers; a considerable drop from more than 70 per cent in 2003.
For the young that prospect is worsening. According to the Resolution Foundation more than 70 per cent of baby boomers had bought their first home before they reached 45 but less than half of Millennials are on track to do so.
Whether they buy or rent, Millennials spend vastly more of their income on housing. The Resolution Foundation’s study showed that in the early 60s the average family spent 6 per cent of their income on housing costs. That has now trebled to 18 per cent.
The rapid growth of the private rented sector means that more and more people live at the mercy of landlords who can choose to evict them whenever it is convenient or financially necessary to do so. Four in 10 30-year-olds live in private rented accommodation, compared to one in 10, 50 years ago.
So it’s no wonder that politicians of all kinds are talking even more about housing. They know how much it matters to the country, but especially to younger voters.
Now the Conservatives are pledging an extra £10bn to fund an extension to the Help To Buy scheme, promising this will help a further 135,000 people onto the housing ladder.
Meanwhile Labour is addressing the other side of the issue, with promises to introduce three-year tenancies and even rent controls.
In the meantime, while politicians squabble about the best ways to improve the housing market, and think tanks publish damning statements on both rent controls and Help To Buy, Millennials remain in property limbo.
Whether they buy or rent they are paying more than previous generations. And the issue of home ownership and housing security is having a direct impact on their wellbeing.
Measures of success
A recent study from the Young Women’s Trust found that 41 per cent of young people experience anxiety over whether they will be able to afford a home in the future and 52 per cent say that the cost of housing is the biggest issue they face.
The latest First-Time Buyers Report from Yorkshire Building Society shows that 56 per cent of those aged between 18 and 40 say that buying their own home is essential to feeling they have succeeded in life. In fact, 20 per cent said that owning a house is more important to them than any other life event, including getting married or having children.
Yet it’s an increasingly challenging goal. The average deposit needed by a first-time buyer rose to £32,000 in 2016, according to Halifax’s First-Time Buyer Review.
That’s a tough ask for people whose rents have risen by more than 15 per cent between January 2011 and August 2017, as Office For National Statistics figures show.
Inevitably, many new buyers rely on their parents for financial support to make that first purchase. The Yorkshire Building Society study reveals that 59 per cent of would-be homeowners say they expect to receive financial support from their family to buy that first home.
However, six out of 10 of those say they are worried doing so will negatively affect their parents’ future finances.
Simon Broadley, senior manager at the building society, says: “There are many parts of the country where average house prices dwarf earnings. Our survey shows how the financial and moral dilemmas facing first-time buyers remain acute regardless of whether they are fortunate enough to have parental support available.”
Once a would-be buyer, or more likely a first-time buyer couple, decides they are ready to make the purchase, the pressure notches up even further thanks to tougher mortgage demands than ever before.
The emotional attachment so many people have to the idea of owning their home means that mortgage applications can be far more fraught than with other financial products.
A recent study by online mortgage broker Trussle shows that 8 per cent of people admitted that applying for their first mortgage had reduced them to tears, with one in four saying they experienced stress while applying.
In fact, 23 per cent of the 2,000 buyers questioned said they had been forced to take time off work to make arrangements for their first mortgage.
Ishaan Malhi, CEO and founder of Trussle, commented: “Buying a home is one of the biggest milestones in someone’s life and should be remembered with fondness, but for so many, it’s an ordeal they’d rather forget. A lot of it comes down to the stress and inconvenience of the mortgage application process.”
Another element that may make the application process additionally distressing is tightened mortgage rules.
Following the 2008 crash, powered by the sub-prime mortgage market, government has required lenders to check the income and outgoings of would-be borrowers and to assess whether they could still afford their repayments if interest rates went up.
That means that costs such as childcare have to be taken into account and this can lead to desperate families lying about the real cost of their bills. A survey carried out last year by uSwitch showed that one in six families had been offered a smaller mortgage than they needed or even been rejected outright because of the cost of their childcare.
Two thirds of those families had then concealed the cost of their childcare to make sure their application was accepted.
Across the UK, people are scraping together deposits despite high rental costs, paying for homes with larger mortgages than previous generations ever needed, and potentially even committing fraud to ensure they can borrow what they need.
Housing is both a financial and an intensely emotional issue – as politicians are increasingly discovering. Without decisive, cross-party action this situation can only get worse.
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