House prices are back in the news today, with the latest report from Nationwide showing a slight rise which means that the cost of the average home is now the same as it was at this time last year.
It can be difficult to make sense of the constant commentary on the housing market (although this BBC guide is quite helpful in explaining the various surveys that are released regularly) but one piece of information from the Nationwide report stands out, which is that the number of people owning their home has now been falling for a decade.
The idea that you should aspire to own your own home has been a constant one in British society for over a century, even though it contrasts markedly with other affluent countries in Europe. Yet this goal is being moved further and further away from young people in the UK. Because of the way in which house prices rose in the years before the financial crisis and the economic difficulties we are now face with, it is harder than ever for young people to acquire their own home. The majority of first-time buyers used to be in the 25-34 age range but 57 per cent of this group now rents.
Even if mortgage lenders were to ease the deposit requirements for first-time buyers, other issues such as low wages, lack of job security, increasing numbers in part-time or self-employed roles and the ratio of house prices to salaries would mean that very few young people would be able to acquire their own property without assistance. Despite the Funding for Lending scheme that the Government introduced last year, there seems to be little possibility of this situation changing any time soon.
Perhaps it is time for a radical rethink of our attitude to property. It may not be possible to change our culture to match that of countries like Germany were renting is the norm, but we could benefit from looking at the policies that other nations have introduced to make their rental markets a far more fair and stable environment for tenants. If it is not going to be possible to purchase your first property until you are approaching 40, then we should be doing everything we can to assist young people who have no option but to rent.
