February 16, 2020
Most would agree that housing is expensive. From families living paycheque to paycheque, to those earning just enough to be considered comfortable. With the amount that housing costs at the moment, the sudden breakdown of a washing machine or a leaky pipe, could mean that the family holiday is postponed for another year in a row.
Housing costs are generally considered to be the biggest chunk of our take-home pay, that’s the way it has always been. But in the current climate, the amount we pay to landlords, or the lump-sum handed over to an estate agent when buying a home, gets larger every year. Even when the amount we earn doesn’t increase at all.
This is why affordable housing means so much to so many people, whether it be newly graduated students, the nuclear family or a well to do twenty-something doctor. The UK Government has promised more homes will be built with a larger percentage allocated to affordable housing. This should mean that people renting and those looking to get onto the property ladder can do so, without breaking the bank or being forced to sell a kidney.
Affordable housing is supposed to be just that, affordable, costing 35% or less of one’s net income (Source: Shelter). But how many people can realistically say that they pay the equivalent of 35% or less each month?
Residential property analysts Hometrack, whose valuations are used by 4 of the top 5 UK lenders, have conducted research showing that the average cost for private renters per calendar month increased by 19% in England and Wales, between 2007 and 2017.
According to the Office for National Statistics (ONS) over the same period, average earnings fell in the UK from £463 per week in 2007 to £458 in 2017. Meaning incomes actually fell by an average of £15 in a decade.
Those in London appear to have it worst, with renters paying on average £1,590 per calendar month, a 29% rise in the past 10 years. With the median weekly wage during this period standing at £692, that doesn’t leave much for all of the other monthly outgoings.
Home ownership has steadily declined since the mid-noughties, with the number of privately rented properties going up by 24% to 1.3 million between 2006 and 2016. Since the financial crash of 2008, more people have opted to rent privately than purchase a property of their own.
This is partly to do with the fact that a lot of the public and private sector haven’t received pay rises in the last decade, but also the sheer lack of genuinely affordable housing available.
After all, home is where the heart is, so you shouldn’t have to worry about whether you can make it to next month’s paycheque, instead you should be able to prosper, both personally and professionally.
In the current housing market, an entire generation of Millennials feel they have been locked out of home ownership. With little to no opportunity to save due to the high cost of living in a city, especially one like London, young people have all but given up on the idea of owning their dream home. Instead they have to settle for renting a small flat with 3 friends or making over an hours journey into the office. And even these solutions can eat up the majority of their paycheques each month.
We all deserve the opportunity to relax after a hard day’s work, enjoy time with family or friends, or learn something new, like how to perfect that new vegan recipe that has eluded you so far. And it’s a hell of a lot easier to achieve all of this if you have a safe, secure and affordable home to live in.