City Survivors: Housing White Paper doesn’t do enough for first-time buyers

14 February 2017

The number of 25-year-old homeowners has plummeted by more than half in 20 years.

According to the Local Government Association (LGA), which represents more than 370 councils in England and Wales, almost half (46%) of 25-year-olds owned their own home 20 years ago compared to just 20% today.

Now I appreciate times have changed, and perhaps fewer people are interested in owning a home at such a young age. But I suspect a large factor in this figure is ever creeping up and, in some locations, rocketing house prices.


I fall into the 80% of people who didn’t own a home at 25. I’ve been renting since I went to university at 18, although I’m hoping that will change this year.

However, despite the fact I feel lucky to even be in the position to consider homeownership, it’s still slightly depressing to see what – or rather just how little – we can afford in London.

I did read one uplifting article from the BBC where four couples managed the extraordinary feat of getting onto the property ladder before the age of 25. The couples had managed to scrimp and save, by cutting down on food bills, not spending money socialising or living with their parents, in order to put down deposits of between 5% and 15% and take out a mortgage for the rest.

But as the LGA’s stats show, this clearly isn’t the norm. Plus only one of the couples was buying in the pricey South East and none of them were buying in London where, according to the LGA, the average size of a deposit needed to get a mortgage is 131% of annual income.

Also, these first-time buyers were working as a tag team; when you have two peoples’ salaries and savings you can reach your goal quicker. But doing it on your own is a lot harder.

Rising rents are part of the problem. While renting is so expensive, how can people save for a deposit? According to the LGA, on average, renters pay 34% of their total household income on rent. In comparison, homeowners pay an average of 18% of their annual income on their mortgage.

Will the government’s new Housing White Paper help renters and homebuyers alike? It includes measures to promote longer tenancy agreements to make the private rental sector more family-friendly, and initiatives to make it easier for small and medium-sized developers to build more homes.

In addition, the government plans to offer a fairer deal to leaseholders – who own the right to live in a property for a set period (often 99 years or more), rather than owning the land it stands on – by reviewing unfair practices where ground rents can increase significantly during the lease.

I understand that longer rental leases may make people feel more secure, and less worried about rent hikes when annual contracts end each year, and more properties will help with the housing shortage – but unless prices come down or more practical help is offered to first-time buyers, this still doesn’t resolve the issue of getting people on to the housing ladder in the first place.

I know there are government schemes available, such as the Help to Buy Isa and the forthcoming Lifetime Isa (although the Help to Buy mortgage guarantee scheme was axed in December), and the fact the government is encouraging saving by topping up your cash  is great.

But while the White Paper is a step in the right direction, it doesn’t go nearly far enough. I’m not sure of the solution but if something doesn’t change, the level of homeownership among millennials will keep on falling.