In January, Halifax stated that the average deposit for first time buyers in the UK was £53,414. This figure alone demonstrates the serious housing crisis in which the UK finds itself – negatively impacting young people, first time buyers and lower income families most significantly. A combination of high deposits, increasing rents and the lack of available social housing are among the principal contributors to the current crisis. However, these issues have been decades in the making – finding their roots in the Right to Buy initiative of Thatcher’s government in 1980s, of which the Local Government Association recently stated ‘can no longer be allowed to exist in its’ current form.’
Right to Buy was first suggested to Jim Callaghan in the late 1970s. According to historian Andy Beckett, there had been increasing interest amongst some Labour MPs in the Labour governments of the 1970s in the growth of consumerism and private property. A housing study under Callaghan’s government in 1977 admitted that ‘owning one’s house is a basic and natural desire.’ Despite this, Callaghan rejected the proposal of Right to Buy and it was instead taken up by Thatcher and the Conservatives. The policy appealed to the aspirational working classes and would be an easy way for the government to make money quickly. The act was passed in 1980, and rapid sales of council properties followed. Within five years of the introduction of Right to Buy, half a million homes had been sold, and the availability of council housing had been subsequently diminished. By the late 80s and early 90s, the economy fell into recession and many buyers had their homes repossessed, peaking at 75,500 in 1991.
In 1996, the association of Residential Letting Agents launched a ‘buy-to- let initiative.’ This initiative boomed in the early 2000s and by 2007, house prices were triple what they had been in 1990. During the recession of 2008, banks reduced lending and mortgages became more difficult to secure. Combined with the lack of social housing because of Right to Buy and the lack of replacement council properties, people faced no choice but to rent privately.
In the last fourteen years, the UK has seen a trend concerning the lack of social housing being built. 2010 saw 39,562 homes built for social housing, compared to 7,644 in 2022. In the same period, the UK has witnessed an increase in the private rental sector. According to government data, the private rented sector (PRS) overtook social housing as the UK’s second largest tenure in 2011-12. The sector has now almost doubled in size since 2020. Last year, the charity Shelter commissioned a poll of 1000 private landlords. It found that more than two thirds of mortgage free landlords had increased their rents in 2023, despite being unaffected by interest rates and have thus been accused of cash grabbing. These higher rents make it incredibly difficult for renters to save for a mortgage as roughly a quarter of private renters spend more than 40% of their income on rent.
The current housing and rental issues faced by the UK have not appeared out of the blue, but are rather a culmination of the worsening housing provision since the 1970s. In 2002, the number of young adults living with parents was 2.4 million. Data from 2022 demonstrates that this figure has increased by over 1 million, with now over 3.4 million young adults living at home. Many young people face the question – will we ever be able to afford our own homes?
Photo by Gonzalo Facello via Unsplash