First time buyers are getting older - no kidding sherlock!

Recently the English Housing Survey was released and it has further supported by two trends within the housing market. Let’s explore these further:

• More families are renting privately – private rented sector for families is increasing with the survey highlighting 37% which is a big increase since the last survey. It is a strange scenario – for me I’ve always been part of a family that owned our house. It may not have always been the best house but certainly allowed us as a family to call somewhere our home and build equity in it. I do have close friends who rent and always will rent – it gives them the flexibility they need and they can still call that place home. I’m not saying one is right and one is wrong but it does highlight that there is an increase and is this could be explained by a lack of affordability of homes.
• First time buyers are getting older and currently stands at an average of 33, up from 31. I purchased my first home in 2008 at an age of 25. Some of my friends were sooner and others still haven’t. Basically it is not surprising that there is an increase. Again highlighting a lack of affordability of homes. In total 46% of people now live privately in the 25-34 age group. There is a reverse fortune of young people with mortgages, which has decreased. Young people are still buying houses but not as often.

The interesting dynamic though to me is when you look at social housing.  People in social housing are feeling more optimistic – presumably because through right to buy they are more likely to own their own home than if they weren’t in social housing. So although I believe right to buy is not beneficial at all to housing associations due to them being starved for a number of years. There has also been a reduction in people receiving the housing benefit, which I believe is due to circumstances in their control (as opposed to them simply not been allowed it).


Times are changing with more people owning their house outright than with a mortgage – a reflection of an aging population where young people cannot afford to get on the ladder. Yet at the same time the private rented sector has doubled since 2002 – a recent select committee report highlighted that 40% of properties bought through right to buy are now in the private rented sector – so clearly a scheme that has worked as it was intended.


I do wonder, based on this report and other similar reports, whether deep down there is housing crisis or really a market delivering badly for some and well for others – and because the ones it is delivering badly for are the more vulnerable it is highlighted as a crisis. Could a simple answer be to tax people who do well (via council tax or capital gains) from the housing market and support those who don’t (via housing benefit or social rents).


If there is a “crisis” let’s look at the supply of land for housing. We set the supply back in 1955 and let’s be honest times have changed. We certainly shouldn’t build everywhere. We have more than enough brownfield land with a number of specialists able to create space that is suitable for housing. We need planning to preserve environmentally valuable land and lots of space for recreation but there is 514,000 hectares of green belt surrounding London, and you only need a tiny fraction of it to more than satisfy housing supply.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the rest of the week

Lee