We are all obsessed with security. Whilst this seems like such a small word, it’s often this word that is thrown about – in a relationship, you need security. In a job, you need security. Security is the reason we invest in pension schemes and invest in bonds; we want security for ourselves in our old age, for our children and even our grandchildren. The idea behind buying a house is the same – we want the security of knowing that we won’t be kicked out by landlords after our meagre pension proves not to be enough to afford the rent.
Personally, I want the security of owning my own home, as well as the freedom to do what I want to it – I can paint walls, decorate, even knock down walls without fear of being evicted for my various ‘home improvements’ that just aren’t my landlords cup of tea. I want to know that I own a property that is totally mine – I can sell it, or pass it down to my children. It’s basically an investment, as one day, I know I’ll be sitting in my own house, without the fear of paying any rent once my mortgage is paid off and knowing I have something valuable to give to my children.
Obviously, not everyone wants to own a house – many are happy to rent. However, for those that do, it’s a minefield. In a society where it is increasingly difficult to get on the housing ladder, I feel almost powerless to where my personal circumstances are taking me – certainly steering me away from the house I want to one day own (with little red roses growing around the doorway and a huuuge kitchen).
I just can’t afford it.
renting a £500,000 flat in London could cost around £2000 a month, whereas actually buying a flat for £500,000 with a two year fixed-rate mortgage at just 2.39% and you’ll actually be paying less than £1,800 a month.
Yes, look how many schemes there are out there – the Help to Buy Scheme, the amount of part-owning, equity schemes etc etc. Yet, what’s the point, when the average house is costing us over £200,000 and the most you can spend on a house with the help to Buy scheme is £50,000 (not exactly leaving a huge amount of room for any ‘luxuries’ I may want). Of course, the argument to this is that this is a ‘starting house’, I’ll have got my foot on the rug, blah blah. But if I’m looking to be paying a mortgage back for 20 years, I am not seeing it short-term, or a something to get me along. I am seeing it as a forever home – I want to have paid my mortgage off and be sitting comfortably when I retire.
Let’s look at the facts – according to Economics website ‘Prime Economics’, since 1993 national house prices have risen from an average of £62,333 to £247,000 which is a staggering increase of 400%!! Although arguably, minimum wage has risen, now the gap between earnings and house prices have astronomically widened, meaning we are now finding it almost impossible to buy a house whilst on minimum wage, plus most mortgage companies will not even look your way (unless you have something ridiculous like a 50% deposit).
It has become something of a pipe dream for those on minimum wage, or unable to raise a high deposit, to own a property. Once upon a time, couples were getting married at 20 and buying a house together by 21. This was our grandparents era – not exactly a million years ago.
Over the past few years, we have seen the highest number of young people living at home; we now have the highest percentage of young adults living at home to record-breaking ages – according to findings from the office for National Statistics, there are now 3.3 MILLION 20-34 year olds still living with parents, a 618,000 leap since 1996. This is shocking, but makes sense when you consider just how much a property now costs.
However, when you also consider just how much it is to now rent a house, you can understand why young adults are choosing to live at home longer. Once you are paying a huge chunk of your earnings towards renting a property, the amount you save obviously dwindles – meaning sometimes our savings are just two digits a month or less, which makes it extremely hard to save up any deposit.
In slightly shocking statistics, renting a £500,000 flat in London could cost around £2000 a month, whereas actually buying a flat for £500,000 with a two year fixed-rate mortgage at just 2.39% and you’ll actually be paying less than £1,800 a month. When buying a house and paying a mortgage is actually cheaper than renting, you can understand just why it is so hard to raise a deposit for a house (which is all so ridiculous).
It’s all hoops within hoops. To buy a property you need a deposit, but you can’t save whilst renting…which is also actually more expensive than paying your mortgage. It’s all very confusing, but the bottom line is you need to have a big deposit, have a steal of a house, be earning enough to satisfy the mortgage-lenders and also be prepared to live in that house for pretty much the entirety of your life.
Hopefully, the economic climate will shift, meaning house prices will drop and wages will go up, with no inflation that can be seen. Yet this may be just a pipe dream and when you don’t have the option to live with your parents, for whatever reason, then it gets extremely hard to clamber onto that housing ladder.
Words by Hayley Freeston