9:26 AM, 3rd November 2020, About 2 years ago 22
The recent policy announced by Boris Johnson that he will turn ‘generation rent’ into ‘generation buy’ by under-writing mortgage deposits for first-time buyers (FTBs) is outrageous and a non-starter for reasons I have outlined today on conservativehome. Click here
Due to word limits, I couldn’t expand on all the reasons this will get nowhere, so would like to add here a huge flaw in the idea – supported by the ‘right-wing’ think tank, the Centre for Policy Studies. They published a report not long ago about ‘resentful renters’, declaring that 3.6 million people fall into this category. Click here
In fact, however, in the small print one might say, they mention that they are including young people who live with their parents in this category. As someone who has two young adults still sharing the family home I always find the negative aspersions cast offensive. Why is it such a terrible thing to live with your parents while in your 20s, with the comfort, home-cooking and often very cheap if not free accommodation thrown in?
I returned to live with my Dad in his Cardiff council house when I was in my 20s, enjoying the vegetarian pasta dishes and ‘two desserts’ he would have ready for me after work, at the same time effortlessly and not even deliberately saving enough for a deposit on a house.
I was not a ‘resentful renter’ and neither are my children now. And when I finally bought a house I didn’t want to live in it for some time as it was too lonely on my own (in addition to it needing thousands spent on it as it needed everything doing to it). So it is not necessarily a good idea to buy too young – unless you are willing to rent the property out and become a landlord, with the huge regulatory burden and risks this entails, not least facing the appalling Section 24. Click here
So, in addition to my disagreement with conflating adults living at home with private renters in the CPS’ ‘resentful renters’ category I would like to know the separate figures for each. This is important because we are often told that if a landlord sells their property and leaves the market – and many are doing this now Click here – this just means that either another private tenant moves in or a first-time buyer buys it, meaning no change to the overall housing provision.
This is not true, as if 1 million people currently living with parents manage to somehow get hold of a property in the private rented sector (PRS) – not coming from ‘generation rent’ but nevertheless becoming ‘generation buy’ – this will create a demand for 1 million more homes. The tenants who need to be evicted to make way for the FTBs will presumably not be offered a home in the new tenants’ parents’ house in a kind of exchange, so where will they go?
What’s more, even more than a million households could be involved – I can’t give an accurate figure as I don’t have the CPS dataset or know if they separated out those living in the family home from those living in the PRS in their raw data.
In a nutshell though I see this latest policy by Boris Johnson going absolutely nowhere.