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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