There are many benefits to owning your own home: being able to put up pictures, decorate, or get a pet without being beholden to your landlord's whims; the security of knowing you won't be evicted when your tenancy ends. But there's only one real hurdle to home ownership for increasing numbers of people: money. And with house prices rising and outstripping wages in vast swathes of the UK, that barrier seems insurmountable.
In a speech to Conservative party conference this week, David Cameron proposed a solution: “starter homes” sold at a 20 per cent discount to 200,000 first time buyers under 40.
For the millions of renters desperately hoping to hop onto the first rung of the housing ladder, couldn't this scheme offer a much needed leg up? With caveats, yes: but the caveats aren't negligible. Shelter estimate that to afford a starter home in London, you'll need to earn at least £76,957, and £50,226 outside the capital. That's more than double the average wage. The actual cost of the homes is 11.5 times the average London wage, and 9.5 times the average salary elsewhere, which makes you wonder precisely how brazen Conservative speech writers were when deciding to call the discounted homes "affordable". Even living in London, with friends who are relatively affluent, I can think of almost no one who could afford these starter homes under the age of 40 –and few are earning that much even in their forties.
Many people under 40 are delaying having children or have resigned themselves to perpetual renting, because house prices and rents are so high they can't afford to buy, or even save for a deposit
The second problem is these homes are only "affordable" once: if you're lucky enough to earn over £77,000 a year, buy a starter home, then sell it after the mandated five years, your next home doesn't come with a 20 per cent discount, and what if the government has done nothing whatsoever to try and lower house prices and rents across the country. And if the Bank of England raises interest rates, your monthly mortgage repayment has increased in the meantime, putting you at a greater disadvantage. Injecting a widget of government cash to get a few wealthy people on the housing ladder while ignoring everyone else is either hopelessly naive or wilfully ignorant.
For the five million renters paying half their salary to their landlords, there's no end to the housing crisis in sight. Many people under 40 are delaying having children or have resigned themselves to perpetual renting, because house prices and rents are so high they can't afford to buy, or even save for a deposit. Meanwhile, increasing numbers of people in their forties are reporting being forced to flat-share due to financial pressures, when they understandably assumed they'd be living with a little more privacy at this point in their lives.
But once the policy is enacted, while a few people are afforded the opportunity to own their own home, far, far more will find it impossible to find an affordable rented home. At the moment, a third of new affordable rented homes are built through agreements with big developers and local councils: in return for planning permission, big builders must build affordable homes. This policy will scrap this obligation and the effect will be two-fold: first, the number of people on council waiting lists for housing will increase – in 2014 it stood at 1,368,312 across the country. Secondly, local rents will be impacted by the lack of affordable rented homes being built, so if you think your rent is high now, try saving for a deposit in a few years when the scrabble for decent flats gets worse.
When help-to-buy came in, the government ignored people who argued it would force prices up. Lo and behold, it did. Now reviving the policy with bells on, you can expect more of the same. The Conservative promise to turn “Generation Rent” into “Generation Buy” looks as flimsy as most under-40s chances of every moving out of a flat share. You're still less likely to get the the keys to your own home than you are to be locked out in the cold.