For a couple of decades now, home ownership has been a solid goal and expectation for many people in the UK. It’s also been a significant source of wealth for those able to buy, as soaring property prices have seen the wealth of home owners increase significantly – according to Halifax, London house prices have risen a staggering 559% since 1983.
But things have changed.
The expectation of home ownership has become a pipe dream for many of today’s under-30s. The dream has been crushed by the rising house prices that have so benefited the previous generation, locking out all but the most affluent from home ownership. This has been compounded by a rental market so expensive in some areas that saving up for a deposit becomes an impossibility, as rent starts to eat up 40 or even 50% of your monthly pay.
Even if you manage to get that deposit together, for many on a low or average salary, getting access to a mortgage can be nigh-on impossible. In London – at the sharp end of our housing crisis – the average house price is now an eye-watering £461,000. If you’re on the London average salary of just under £28k, you can generally forget a mortgage for that amount (even if there’s two of you looking to buy together).
Where’s the building boom?
The obvious solution is to build more housing; but even if the government were suddenly to begin to build the 300,000 houses per year estimated to be needed to address the housing crisis, it would be many years before supply met demand. Shelter’s recent report “A Better Deal – towards more stable private renting” outlines the reality: a generation of young people (and also increasingly families) is trapped in renting, with no clear path towards home ownership. Renting is increasingly the “new normal”.
And if renting is the new normal, we need to make some serious changes. My experience of renting in London is of a wild west market where deposits are insecure, and tenancy contracts are generally no longer than a year and provide no protection from often random rent rises. (My most recent experience was of a 15% increase. We moved out.) The result is that renting is an unstable and insecure housing option. While you’re young, that’s one thing – but if renting is going to be a long-term reality for a much larger proportion of the population than previously, including families with children, then things need to change.
The rental market: open to abuse
Shelter’s proposed solution is to make renting a more stable and secure option for tenants. Their report suggests a new contract for renting, giving longer tenancies and more security. That is rather than the default year-long contracts currently used, which ultimately benefit only the agents (who reap the rewards of contract renewals or finding new tenants once a year.) And the report suggests that this change will also benefit most landlords, who are generally seeking out reliable tenants who will look after their property and pay rent and bills on time.
That’s one approach, and it would certainly make a real difference to tenants. But we also need to look at the high costs of renting in certain areas. If renting is the new reality, the cost of renting needs to be realistic.
What’s your experience of renting? Do you ever think you’ll be able to buy a house, and if not, how does renting need to change to make it a more viable long-term option? If you’re aged 16-30 and affected by these issues, enter the IF Film Competition and get your voice heard.