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It’s more expensive to be poor. Now housing costs make it more expensive to be young too


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https://www.newstatesman.com/politics/uk/2020/02/it-s-more-expensive-be-poor-now-housing-costs-make-it-more-expensive-be-young

New research confirms that younger households face higher housing costs than older ones – but the government has no obvious interest in addressing this problem. 

BY JONN ELLEDGE

 

Being poor, as everyone from the American novelist James Baldwin to the chief of police on Terry Pratchett’s Discworld has noted, is expensive. Everything from higher interest rates on debt to the poor quality of cheap shoes means that you’re more likely to bleed money if you don’t have much of it to start with.

Now, in a development that it’s hard to see as a coincidence, it turns out that being young is expensive, too. Figures from the Office for National Statistics show that, in 2018, the average UK household headed by somebody under 30 spent £171.40 a week on housing and related costs. The older the household gets, however, the more those costs fall, until the over-75s are spending just £70. To sum up: the older you are, the less it will cost you to live indoors so that you can keep breathing in and out. (To get these numbers, I’ve combined two different lines in the ONS spreadsheet, numbered 4 and 13.1. Hat tip: Anya Martin of Priced Out, who unearthed the figures.)

How has this happened? Well, younger households are disproportionately likely to rent, and with interest rates as low as they are, it’s much cheaper to own than to rent your home. (In 2018, Halifax, which as a mortgage lender admittedly has an interest in pushing this one, found that first-time buyers were nearly a grand a year better off than renters.) Those younger people who have managed to buy will have done so later, and thus on average have larger mortgages. Older renters, meanwhile, are more likely to be in subsidised social housing, and less likely to be in the private rental sector, which is, let’s not mince our words here, expensive, poor quality, under-regulated and bad. 

So: whichever way you cut it, younger households face higher housing costs than older ones, and, while we’re at it, are less likely to have any assets to show for their trouble. All of which, if you’ve spent even half a second thinking about this, is not in any way surprising, but it’s nice to be able to quantify exactly how screwed you are sometimes, isn’t it? 

This is bad in all sorts of ways. It’s a drag on disposable income and living standards. It makes it harder for young people to settle down and start families, and do all those other things they’re meant to do as they stop being young people. And it means money that they would previously have spent in helpful, economy-boosting ways instead flows straight to the bank accounts of home sellers or landlords, where it will often proceed to sit doing not very much.

The Tory party, you might dimly recall, was once in favour of things like families and a functional economy. So what is the government doing about all this? 

Well: last week Housing Secretary Robert Jenrick, a man so committed to his brief that in the run up to the election he couldn’t even be bothered to show up at the housing hustings, unveiled something called the “First Homes” scheme. This, we are told, will provide selected first-time buyers with newly-built homes at a 30 per cent discount, saving them as much as £100,000. Key workers, such as nurses, police and military personnel, will get priority.

How many homes will be included in the new scheme is not exactly clear, presumably because whether the scheme is actually workable is not exactly clear, either. (It’s still out to consultation.) But, as with almost everything else about government housing policy, it’s bad in multiple different ways. It means focusing government time and energy on helping a tiny number of people into home ownership, while ignoring everyone else. It does nothing to help renters, or to increase the number of homes being built: since it involves selling at a discount, indeed, it might do the opposite. And it means redirecting developer contributions from social housing and community facilities to subsidies for buyers who, by definition, are relatively comfortably off. After the last decade of Tory housing policy, what else would you expect? 

So: it’s more expensive to be poor, it’s more expensive to be young, and the government has no obvious interest in addressing any of this because it’s worked out it doesn’t need your stupid vote anyway. What effect this will have in the long term, on either our economy or political culture, is hard to determine, but it’s difficult to conceive of a way in which it might be good.

In the meantime, younger households will just have to look to their own defences. Perhaps they could simply move somewhere cheaper, like a town with no jobs a couple of hundred miles from their friends and family, or, failing that, the early 1970s. Then again, perhaps they could just quit the avocado toast. In this mess of a country, what’s the point of trying to stay healthy anyway? 

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The Government have managed to get an 80-seat majority without the need to address inter-generational inequality. Unfortunately, I am at an age where I can't wait twenty years for the boomers to die. It will be Gen Z that will benefit the most from the Boomer exodus.

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3 hours ago, DonJop12 said:

The Government have managed to get an 80-seat majority without the need to address inter-generational inequality. Unfortunately, I am at an age where I can't wait twenty years for the boomers to die. It will be Gen Z that will benefit the most from the Boomer exodus.

Housing is much less of an issue in red wall towns and among the new Tory vote in the north and midlands - you can still buy houses just about or rent a reasonable place on a typical average salary. The very poor - yes - but there aren't enough of them and they don't tend to vote anyway.

The Tories are finished in most of London due to house prices and high rents  - but they have discovered you don't need London anymore to win a big majority.

 

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4 minutes ago, Locke said:

Which is excellent news.

It’s a sort of prophecy coming true - the left a supporter of in your face multi culturalism has long held up London as a ‘world city ‘ distinct from the U.K. now they have their wish 

Be careful what you wish for 

Edited by GregBowman
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11 hours ago, DonJop12 said:

The Government have managed to get an 80-seat majority without the need to address inter-generational inequality. Unfortunately, I am at an age where I can't wait twenty years for the boomers to die. It will be Gen Z that will benefit the most from the Boomer exodus.

Speaking as a boomer, I shall be leaving all my worldly goods to my middle aged children and I doubt they will be gifting anything to you.

Your best bet would to pray for the demise of your own parents, you might do better out of their exodus.

Have a nice day.

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19 minutes ago, GregBowman said:

It’s a sort of prophecy coming true - the left a supporter of in your face multi culturalism has long held up London as a ‘world city ‘ distinct from the U.K. now they have their wish 

Be careful what you wish for 

+1 

This multi multiculturalism was forced on the population who were knot asked if it was what they wanted or agreed with 

They voted against it twice now and the left still bury their head in the sand an think that the reason they lost is because people are so silly they did not understand the message from the left and all they have to do is make sure they understand it next time

 

12 minutes ago, Bruce Banner said:

Speaking as a boomer, I shall be leaving all my worldly goods to my middle aged children and I doubt they will be gifting anything to you.

Your best bet would to pray for the demise of your own parents, you might do better out of their exodus.

+1 - When my grandparents and [parents go the only people who will benefit financially will be me and my family.


When I go the only people who will benefit will be my kids and any kids that they have at that time

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22 minutes ago, Bruce Banner said:

Speaking as a boomer, I shall be leaving all my worldly goods to my middle aged children and I doubt they will be gifting anything to you.

Your best bet would to pray for the demise of your own parents, you might do better out of their exodus.

Have a nice day.

Also a (late) boomer and will do likewise.  However, there will be a partial redistribution in the that much of the artificial value of the property (possibly 2 properties) we leave them will evaporate as prices correct to a level that the then young adults can afford (revert to trend), our offspring, and their offspring, make financial mistakes (they will) and the socio-economic wheel turns.

Which is fine - as boomers we saw unearned, undeserved and untaxed gains in wealth alongside the earned ones.  Locking those excess profits in 100% in perpetuity through inheritance is unrealistic and frankly unhealthy if a pre-occupation.
I feel mentoring my adult children to help them build their personal capital (value to employers or ability to run their own business) is more important than honing and protecting their inheritance.

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I'm  not having any Kids, i'm 40 this year and i aee myself too old to start a family now. Plus i wouldn't want to bring ip children in this world as it is, and how it looks to be going.

So i see very little incentive to over save/buy a property to pass down, as there will be noone in my immediate family to pass it too. 

I have a pension, and making provisions for my future, but i will be making sure i blow as much as possible on myself before i go, than having to think about what i should leave for my offspring.

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2 hours ago, Monkey said:

I'm  not having any Kids, i'm 40 this year and i aee myself too old to start a family now. Plus i wouldn't want to bring ip children in this world as it is, and how it looks to be going.

So i see very little incentive to over save/buy a property to pass down, as there will be noone in my immediate family to pass it too. 

I have a pension, and making provisions for my future, but i will be making sure i blow as much as possible on myself before i go, than having to think about what i should leave for my offspring.

I will be making sure I blow as much as possible overseas so the UK established powerful and wealthy who have screwed me over so badly don't get their hands on it.

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1 hour ago, Wayward said:

I will be making sure I blow as much as possible overseas so the UK established powerful and wealthy who have screwed me over so badly don't get their hands on it.

Looks like the only game worth playing.

Short the UK into extinction then f**k off somewhere warm with your winnings. ?

 

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1 hour ago, Wayward said:

I will be making sure I blow as much as possible overseas so the UK established powerful and wealthy who have screwed me over so badly don't get their hands on it.

So all the leaders in all other nations are totally wonderful and not in any way corrupt LOL 

The age of entitlement - "if I cannot have everything I want it must the the govts fault never my own I am a victim"

"anyone who has more than me is lucky and should be despised"

"nothing I could have done differently such s buying a house when prices were affordable" 

 

4 hours ago, hotblack42 said:

I feel mentoring my adult children to help them build their personal capital (value to employers or ability to run their own business) is more important than honing and protecting their inheritance.

I will do both

 

 

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3 hours ago, mallish said:

So all the leaders in all other nations are totally wonderful and not in any way corrupt LOL 

The age of entitlement - "if I cannot have everything I want it must the the govts fault never my own I am a victim"

"anyone who has more than me is lucky and should be despised"

"nothing I could have done differently such s buying a house when prices were affordable" 

 

I will do both

 

 

Do you have nothing better to do than troll this site with brainless rubbish?

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12 hours ago, Bruce Banner said:

 

Your best bet would to pray for the demise of your own parents, you might do better out of their exodus.

 

1.     My parents had me relatively young, so I am likely to be in my late 50s before their demise assuming they reach the average expectancy.  An inheritance would be more useful to my own children at that point.

2.     They might have social care costs. Among my peer group a definite factor in achieving homeownership is whether an inheritance is ‘lost’ to social care or ‘protected’ by say a death from cancer or heart disease.

3.     There might not be any money left in any case. A couple of inheritances and right-to-buy gains have caused a general lack of financial discipline.  

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8 minutes ago, DonJop12 said:

1.     My parents had me relatively young, so I am likely to be in my late 50s before their demise assuming they reach the average expectancy.  An inheritance would be more useful to my own children at that point.

2.     They might have social care costs. Among my peer group a definite factor in achieving homeownership is whether an inheritance is ‘lost’ to social care or ‘protected’ by say a death from cancer or heart disease.

3.     There might not be any money left in any case. A couple of inheritances and right-to-buy gains have caused a general lack of financial discipline.  

Ye gods :rolleyes:.

We are fortunate that our children do not see us as a money tree, preferring to make their own way in the world. Whenever the subject of inheritance comes up they tell us not to worry about them, rather spend the lot and have a good time. They all have secure well paid jobs and their own houses, achieved by hard work at school, uni, and the workplace.

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Being young is a disability now.

We got a local council magazine (don't know how it turned up there) and on the back there was an advert appealing to the charitable nature of the reader. It wasn't to raise awareness of any kind of disease. It wasn't to raise money for the blind or any other kind of disability. Not for homeless either.

It was asking the reader to help young people (by letting them be like sort of lodger / helpers with lower rents, a bit like the Victorian times perhaps), with the connotation that they are disadvantaged and probably homeless anyway.

The absurdity of it made me laugh. Sign of the times. Completely stupid.

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11 hours ago, Monkey said:

I'm  not having any Kids, i'm 40 this year and i aee myself too old to start a family now. 

Lol. I was 37 when my 1st kid arrived and 45 when my second arrived, my wife was 42 when our second arrived. We don’t feel that old!

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13 hours ago, Monkey said:

I'm  not having any Kids, i'm 40 this year and i aee myself too old to start a family now. Plus i wouldn't want to bring ip children in this world as it is, and how it looks to be going.

So i see very little incentive to over save/buy a property to pass down, as there will be noone in my immediate family to pass it too. 

I have a pension, and making provisions for my future, but i will be making sure i blow as much as possible on myself before i go, than having to think about what i should leave for my offspring.

I would say the having kids thing is more about financial position than age at least for the man anyway. 

you are good to go up to 50 ish health permitting of course.

personally I don't see myself going down that route as i would need to be minted to bother with all of that, life is far too competative now and kids would need the best to have half a chance in this dog eat dog world. I doubt I could live with a woman anyway I like my own way too much ?

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On 19/02/2020 at 21:23, DonJop12 said:

The Government have managed to get an 80-seat majority without the need to address inter-generational inequality. Unfortunately, I am at an age where I can't wait twenty years for the boomers to die. It will be Gen Z that will benefit the most from the Boomer exodus.

We have a two party system. We have one party offering 'more of the same' which isn't great but manageable, and one party offering bizarre policies and fascination with trans people and Israel. Is it any wonder the tories win>?

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41 minutes ago, cbathpc said:

We have a two party system. We have one party offering 'more of the same' which isn't great but manageable, and one party offering bizarre policies and fascination with trans people and Israel. Is it any wonder the tories win>?

Also the bizarre party (Labour) also support HTB and all the other props plus wanting to get rid of the benefit cap.  There was no choice which wanted to make housing cheaper!

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7 hours ago, cbathpc said:

We have a two party system. We have one party offering 'more of the same' which isn't great but manageable, and one party offering bizarre policies and fascination with trans people and Israel. Is it any wonder the tories win>?

My friend,as someone from a very working class background I could not agree more.  

 

16 hours ago, Bruce Banner said:

Ye gods :rolleyes:.

We are fortunate that our children do not see us as a money tree, preferring to make their own way in the world. Whenever the subject of inheritance comes up they tell us not to worry about them, rather spend the lot and have a good time. They all have secure well paid jobs and their own houses, achieved by hard work at school, uni, and the workplace.

And that is how it should be - but if people want to go to uni and study sociology and end up stacking shelves good luck to them.  

 

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7 hours ago, iamnumerate said:

Also the bizarre party (Labour) also support HTB and all the other props plus wanting to get rid of the benefit cap.  There was no choice which wanted to make housing cheaper!

Yes, Labour's offer was poor. The only reason to vote for them was that John McDonnell as Chancellor might have told the bankers to get stuffed when they next came looking for a handout after a drop in house prices. A Tory Chancellor will be handing over your taxes to the bankers faster than you can say "there you go old chum, by the way are you and Petronella free next Saturday for drinks and nibbles at our place?"

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  • 415 Brexit, House prices and Summer 2020

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      • up 5%



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