How The Housing Bill Left Young People Behind
The Debrief: The housing bill was announced at the beginning of the year as a solution to the housing crisis. But who exactly is it supposed to be helping?
Let’s go back to this morning. Where did you wake up? Was it in a double-ish bed in a tiny/damp room? Was it a bed in a living room of a flat because that’s a way to split rent? Was it over an hour’s sweaty commute from where you work? Was it in a flatshare with someone you just can’t stand but are obliged to live with because to move out would do a disservice to your former self, a panicked soul who spent weeks meeting be-cufflinked estate agents with a desire to see you inhabit a windowless room before eventually lucking out with this friend-of-a-friend’s temporary sublet situation?
Unless you’re lucky enough to be housed by your parents - wealthy ones, well-located ones, or ones so affably tolerant of your adult lifestyle that living at home, as 26% of those between 20-34 do, is a reasonable prospect - that’s what your reality is. The drudgery of renting as a young worker who spends on average 41% of their salary on your lodgings, doesn’t just stem from the high prices, but the binds they then put people into.
At the beginning of this year, as a solution to the UK’s housing crisis, David Cameron announced the Housing Bill. Not only does it set out to deliver a million homes by 2020 and help ‘support hard-working people into home ownership’, but the Government will also be selling off what he calls ‘sink estates’.
When telling BBC Radio 4 about the Housing Bill, Greg Clark explained: ‘We know that consistently 90% of people aspire to own their own home, and for many years now home ownership has been in decline.’
But do young people really want aspire to own their own home? If a 2014 YouGov study is anything to go by, no. The results were that 21% of young people surveyed said they could foresee it taking more than ten years for them to get a mortgage. A further 38% said it would take them 5-10 years to do the same. This is a stark contrast to a YouGov study from 2011, where 80% of young people aspired to own their own home by the time they were 30! While the Conservative party reminds us of its valiant attempts to ‘be the builders’ of the UK to help solve the housing crisis, is it really going to help any of the 3.3 million young people who rent, often living in overpriced, cramped or poor quality housing?
‘My parents paying a mortgage was always just a part of my life and so I thought it would be part of mine, too’ says Sophie Gallagher, a 24-year-old writer. She pays £550 per month to share a three-bed in Brixton, south-west London, with five other people; her boyfriend and two other couples. She’ll be there for a good long while, because, she tells The Debrief: ’I don't think enough is being done to help anyone outside of the property bubble get in it.’
Moving out of London just isn’t an option, because the commute isn’t worth it. Back home with her parents in Essex, she was doing a two and a half hour round trip every day to get to work. What’s more feasible is that this renting lark’s for life: ‘My living situation isn't difficult and I don't want to pretend it is. I think that the prospect of owning my own home diminishing is something I have come to terms with.
‘Both of my parents have spent their whole lives trying to pay off their mortgage debts and so I don't really want to tie myself into the same fate.’
As for others, the consensus seems more set. Jessica Hutchby, a 23-year-old student from Derby, spends £160 per week for her halls in London, and she gave up on the idea of owning a place ‘After the first recession we had in 2008’
From then, she knew full well ’that the minimum living wage is not enough to be able to pay a mortgage and then also be able to live.’
That said, she’s heard of the Government’s Help To Buy ISA plan, which, she says, ’gives a small amount of hope that depending on the job you've got you might be able to buy somewhere.’
The idea is, for every £200 you save, the Government will give you £50, up to £3,000.
So, if you don’t mind a detour, here’s the maths. Let’s say you have someone you can buy a home with, and you’re both on the UK’s average salary of £26,500. Let’s say you can save £200 a month.
After jumping though those hurdles, you’ll have each saved £2,400 a year. After nearly six and a half years, you both would have saved £15,000 each - your capacity - and the Government will have given you each £3,000. So that’s £21,000 for a deposit.
Considering mortgage lenders tend to offer buyers about five times their salary, you could find a place for £286,000. That is exactly the average price of a house in the UK in 2015. Lucky, eh? However, with house prices rising on average 6.1% a year, that house will be £407,998 by the time you’ve saved up. And while rents rise at the whim of landlords or in line with real property prices, would you be able to set aside that £200 a month? It’s no wonder young people have given up on the idea of owning a place.
A Department for Communities and Local Government (DCLG) spokesperson told The Debrief: ‘The government is determined to extend home ownership to anyone that aspires to own their own home,’ and guided us to the different schemes in place to help young people get on the property ladder: ‘Anyone thinking about home ownership and those who believe it is out of reach can find out what help they could get at www.ownyourhome.gov.uk.’
But as for people renting right now - even for those who want to be able to save using that Help to Buy ISA but have to rent in the mean time -there is no official line from the DCLG. This wouldn’t be so alarming if the Government hadn’t just voted against a proposed amendment to the Housing Bill that would have made it a legal requirement for landlords to make their homes fit for human habitation. The argument was that making a home inhabitable would steepen rent prices and create too much administration for already cash-strapped councils.
Dan Wilson Craw, policy manager at Generation Rent told The Debrief: ‘Because it’s so hard to save, millions of people are facing a lifetime of renting and the government is doing nothing to make their lives easier. The prospect of years of renting wouldn’t be so terrifying if tenants were protected from unreasonable rent increases and being evicted on the landlord’s whim. This should be the government’s focus, along with greater ambition for house building.’
While 53% of private renters are finding it hard to pay their rent, according to a YouGov poll for Shelter, one million of the UK’s homes are substandard. The IPPR North think tank found that homes in the private sector are now the most expensive yet in the worst condition.
But the Housing Bill won’t address that.
Wilson Craw adds: ‘The only action politicians have taken so far is introduce a series of gimmicks which will at best help a small fraction of the millions stuck renting, and at worst pump up house prices by creating extra demand for limited supply of homes.’
Shadow Minister for Housing John Healey is unimpressed with the Conservatives’ decisions, too, telling The Debrief: ‘We’ve seen five years of failure on housing under Tory Ministers, with rising rents, soaring homelessness, home-ownership down to the lowest rate in a generation and the lowest level of housebuilding in almost a century.
‘Young people on ordinary incomes have been hardest hit. The number of under 35s owning a home has plummeted by a fifth. The government’s housing plans won’t do anything to get to grips with the causes of this failure, and in many areas they’ll make things much worse.’
The housing crisis is so dire that an ‘affordable’ property has been defined by the Government as housing costing up to £450,000, something which Campbell Robb, Chief Executive of Shelter, the housing and homelessness charity, told The Debrief is: ‘at the expense of the genuinely affordable homes this country desperately needs’.
At the same time, Cameron’s pledge to bulldoze the ‘sink estates’ will actually cut down the number of houses we have available: ‘You don't solve an affordability crisis by getting rid of the few affordable homes we're building, yet that's exactly what this policy will do.
‘There's nothing wrong with helping people onto the property ladder, but the government has to invest in genuinely affordable homes to buy and rent for all of those on ordinary incomes who are bearing the brunt of this crisis’
The solution is becoming clear: we don’t only need more housing, but better quality housing for people, regardless of their age or where they can afford to live. But just as the housing crisis has provoked a re-setting of the goalposts when it comes to Government definitions of ‘affordable’, It has changed definitions of age. So Help To Buy is available for ‘young’ people, meaning everyone under the age of 40. By lumping in two fundamentally different sorts of people - adults with years of work under their belts, and perhaps children - with much younger people, who are perhaps just gaining a foothold in their careers, the Government can’t begin to acknowledge their distinct differences. While older ‘young’ people with children are more likely to be set on finding themselves a nest egg for their dependents, a pension and a way of paying for their social care once they hit retirement, actual young people might even be happy to rent should they wish to explore different parts of the country, or try out different sorts of jobs and education before they settle on a steady career.
But sadly, with rents rising, and a likelihood that many ‘affordable’ homes will only be snapped up by those rich enough to afford them, to then be let out to more private tenants, it looks as if we can expect much more of the same. So it’s probably about time you make amends with that pesky flatmate, even if they did take the last drop of your milk, there are much bigger fish to fry.
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