In 1982 after an “experiment” of living in London, Mrs H and myself came across an old, unmodernized 3 bed Victorian terraced house in Wembley for sale at £22,500. We were close to the 10 per cent deposit needed to get a mortgage and with some help from our parents and grandparents we cobbled together enough and then sold some of the furniture that was being left to pay the conveyance fees.
Like many young couples owning a property was something that we felt was a must. We saw home ownership as a way to “stop wasting money” on renting, as a cheaper alternative to renting, and as a way to enjoy a bit creative home improvement.
Our hopes and desires are mirrored by today’s young couples. A recent Joseph Rowntree Foundation report “Public Attitudes to Housing” shows that “ The importance of housing in relation to life stage is apparent from many studies that show that early career professionals may feel content to share and rent, but as they establish themselves in employment and reach their late 20s or early 30s, thoughts of forming partnerships, starting a family, career aspirations and buying a first home all come to the fore”. This same survey found that 79% of people still see home ownership as a priority.
Yet that same home in Wembley, 20 odd years later would cost around £350,000 and require a minimum deposit of £35,000. If we look at the situation since 1990 average house prices have risen by 280% whilst wages have increased by an average of 175% pushing up the ratio between income and house prices from 3:1 to 4.2:1 and according to the National Housing Association putting the UK on a rapid trajectory to first time ownership being achievable at an average of 43 years old (without family help).
This all clearly points to a change of opportunity for new generations of Wayne & Gerardine Hemingway. Would we have been able to put down roots in London in today’s housing economic climate? Probably not. Would we have been content to rent until well into our 30’s? Probably not. Would we have considered buying and making a go of life in our home area of East Lancs? Quite possibly.
London has always had a gravitational pull for the creative industries and that has enabled it to become one of the leading (if not the preeminent) creative world capitals. For some this brain drain is seen as damaging, making the UK too reliant on its capital city. Others argue that London’s strength has a trickledown effect to the country as a whole.
Whatever it is quite conceivable that the housing affordability gap between London and the regions could have an enormous impact on future demographics and business start ups.
Could there be a reduction in the brain drain and a generation that becomes less mobile?
Could we see our regional cities becoming larger creative hotspots and benefiting the regional economies? Will London suffer as a result?
Will the financial institutions find a way to make home ownership more achievable for first time buyers?
Your guess is as good as mine.