[Diggers350] An Englishman’s 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 Englishman’s Home? It Now Takes 24 Years To 
Save For A Deposit, Compared To Three Years In The 1980s


March 2022 <https://tlio.org.uk/author/tony/>Tony 
a comment

Now takes 24 years to save for a house deposit, 
compared to three years in the 1980s



Britain’s reputation as a nation of home-owners 
is under threat. While it’s true that just under 
two-thirds (65 per cent) of us own our own place, 
the home-ownership rate has 
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.


Given this backdrop, it’s perhaps unsurprising 
that significant numbers of Britons are resigned 
to the prospect of never owning, as highlighted 
in new data from the 
of England. It shows that just under-half (46 per 
cent) of the one-third of families who don’t 
already own their own home believe they’ll never 
do so (only 32 per cent think they will 
definitely buy, with 22 per cent saying they don’t 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 won’t 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.


As the final chart shows, members of the 
‘never-buy’ population are much more likely to 
point to negative ‘can’t buy’ reasons (relating 
to costs, access and financial concerns) than to 
active ‘won’t buy’ lifestyle choices.


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) don’t think 
they could access a mortgage due to their credit history or employment status.

In contrast, just 15 per cent say they won’t buy 
because they don’t want to be in debt and 13 per 
cent don’t want the commitment. A sizeable 
minority (17 per cent) say they like their 
current home and therefore don’t 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 
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 
don’t 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
>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.
>AM · Mar 15, 2022·
>Tony Gosling 
><https://twitter.com/boys_nicholas/status/1503709390972542976>Mar 15
>PS: source is
>via DCLG (now
>) at 
>Dealing with the housing aspiration gap • Resolution Foundation
>Britain’s reputation as a nation of home-owners 
>is under threat. While it’s 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...
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