[Diggers350] An Englishmans Home? Now 1/3 of a lifetime to save for a deposit
Tony Gosling
tony at cultureshop.org.uk
Wed Mar 23 15:57:54 GMT 2022
An Englishmans Home? It Now Takes 24 Years To
Save For A Deposit, Compared To Three Years In The 1980s
https://tlio.org.uk/an-englishmans-home-it-now-takes-24-years-to-save-for-a-deposit-compared-to-three-years-in-the-1980s/
<https://tlio.org.uk/an-englishmans-home-it-now-takes-24-years-to-save-for-a-deposit-compared-to-three-years-in-the-1980s/>23
March 2022 <https://tlio.org.uk/author/tony/>Tony
Gosling
<https://tlio.org.uk/an-englishmans-home-it-now-takes-24-years-to-save-for-a-deposit-compared-to-three-years-in-the-1980s/#respond>Leave
a comment
Now takes 24 years to save for a house deposit,
compared to three years in the 1980s
<https://www.resolutionfoundation.org/comment/dealing-with-the-housing-aspiration-gap/>https://www.resolutionfoundation.org/comment/dealing-with-the-housing-aspiration-gap/
<https://www.resolutionfoundation.org/about-us/team/matthew-whittaker/>Matthew
Whittaker
Britains reputation as a nation of home-owners
is under threat. While its true that just under
two-thirds (65 per cent) of us own our own place,
the home-ownership rate has
<http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do>fallen
from 73 per cent since 2007. This downward trend
has occurred despite the proportion owning their
home outright continuing to rise gently in recent
years (thanks to a combination of demographics
and the paying off of mortgages among many in the baby boomer generation).
The overall decline has instead been driven by a
very sharp reduction in new entrants to home
ownership, with the proportion of households
buying a home with a mortgage falling by a fifth
since 2007 (from 47 per cent to 38 per cent).
With house prices outpacing earnings growth for
most of the last 20 years, affordability has long
been a problem for younger families. And, while
the financial crisis sparked a modest and
temporary correction in prices in some parts of
the country, it had an even deeper and
longer-lasting effect on pay. Add in the overdue
tightening of mortgage criteria that has taken
place in recent years driven initially by the
credit crunch and more recently by regulation
and buying a home appears an ever more distant dream for millions.
As the chart below shows, low to middle income
households saving 5 per cent of their disposable
income a year were able to accumulate the deposit
required for an average first time buyer home
over the course of around three years in the
1990s. Today that figure is 24 years.
Emacs!
Given this backdrop, its perhaps unsurprising
that significant numbers of Britons are resigned
to the prospect of never owning, as highlighted
in new data from the
<http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2015/q4.aspx>Bank
of England. It shows that just under-half (46 per
cent) of the one-third of families who dont
already own their own home believe theyll never
do so (only 32 per cent think they will
definitely buy, with 22 per cent saying they dont know).
As the next chart shows, the proportion is
inevitably higher among lower income households
with 57 per cent of non-owners in the poorest 20
per cent of the population saying they wont ever
buy. But the figure still stands at one-third (33
per cent) in the fourth quintile and one-quarter
(25 per cent) among the richest 20 per cent.
Emacs!
As the final chart shows, members of the
never-buy population are much more likely to
point to negative cant buy reasons (relating
to costs, access and financial concerns) than to
active wont buy lifestyle choices.
Emacs!
Close to half (46 per cent) describe being unable
to afford up-front purchase costs such as
deposits, stamp duty and estate agent fees as one
of the three most important factors behind their
response; with a third (33 per cent) pointing
similarly to the unaffordability of mortgage
costs. A similar number (32 per cent) dont think
they could access a mortgage due to their credit history or employment status.
In contrast, just 15 per cent say they wont buy
because they dont want to be in debt and 13 per
cent dont want the commitment. A sizeable
minority (17 per cent) say they like their
current home and therefore dont want to move,
but this figure drops to 11 per cent when
focusing on the under-45s. And just one-in-ten
(11 per cent) say they prefer the flexibility of
renting, highlighting that this is rarely a first-choice destination.
Given these responses, it is easy to understand
why politicians remain pre-occupied with offering
voters hope when it comes to getting on the
housing ladder. In recent years the Chancellor
has introduced a myriad of new schemes, including
four Help to Buy programmes (shared equity,
mortgage guarantee, ISA and London) and Right to
Buy extensions. Yet in truth, such demand-side
approaches can only ever help on the margins,
bringing forward the moment at which some buy
their first home, but not being sufficient to get
low and middle income families in higher-cost
parts of the country over the line.
Indeed, to the extent that these schemes have
stoked demand and so propped up house prices in
recent years, they have served to make
home-ownership even less attainable for many,
while increasing the gains flowing to older
home-owners who have been the main beneficiaries
of the sustained housing boom an important part
of the growing
<http://www.resolutionfoundation.org/publications/the-pinch-how-the-baby-boomers-took-their-childrens-future-and-why-they-should-give-it-back/>generational
divide identified by David Willetts and others.
Increasing housing supply offers much more
potential for dealing with the aspiration gap on
housing. And the government took some welcome
steps in this direction with its doubling of the
housing budget at the Autumn Statement. Yet
boosting supply is inevitably more difficult than
supporting demand, with practical (housebuilders
capacity) and political (voters resistance)
barriers meaning that meeting the ambition of one
million new homes by the end of the parliament is far from guaranteed.
Of course it would be wrong to put all our eggs
in the traditional ownership basket. Government
strategy must also be focused on improving the
social and private rental offer to families in
terms of prices, appropriateness and standards
and build on efforts that allow people to
part-own their homes or save for a deposit while they rent.
Housing has long been a national obsession, yet
efforts to deal with the fundamental mismatch
between supply and demand rarely move beyond
political posturing. With the situation only
likely to get worse, offering realistic housing
hope for the half of non-owner households who
dont see themselves ever buying means taking a
much more forensic approach to this most British of problems.
At 13:44 16/03/2022, Tony Gosling wrote:
><https://twitter.com/boys_nicholas>Nicholas Boys Smith
><https://twitter.com/boys_nicholas>@boys_nicholas
>It takes 24 years to save for a deposit for a
>house compared to three years in the 1980s.
>Arguably the most important fact in modern British domestic politics.
><https://twitter.com/boys_nicholas/status/1503646965682348035>8:19
>AM · Mar 15, 2022·
>Tony Gosling
>
>https://twitter.com/boys_nicholas/status/1503709390972542976
>
><https://twitter.com/boys_nicholas/status/1503709390972542976>Mar 15
>PS: source is
><https://twitter.com/resfoundation>@resfoundation
>via DCLG (now
><https://twitter.com/luhc>@luhc
>) at
><https://t.co/xMuN7zvBlK>https://resolutionfoundation.org/comment/dealing-with-the-housing-aspiration-gap/
>&
>https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/590464/Fixing_our_broken_housing_market_-_print_ready_version.pdf
>(p.10)
><https://t.co/xMuN7zvBlK>resolutionfoundation.org
>Dealing with the housing aspiration gap Resolution Foundation
>Britains reputation as a nation of home-owners
>is under threat. While its true that just under
>two-thirds (65 per cent) of us own our own
>place, the home-ownership rate has fallen from 73 per cent...
><https://twitter.com/RacingPuma>
>[]
><https://twitter.com/RacingPuma>
>
>
>
>
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