What it means: The IFS (the Institute for Fiscal Studies – they’re a politically independent organisation who do lots of social and economic research then tell the government what it should be doing) has done some number-crunching on house buying, and concluded young people are pretty much screwed. The problem is that over the last twenty years, house prices have gone up more than young people’s wages have. A lot more, in fact – a 173 percent rise for houses vs. a 19 percent for wages.
The upshot is that home-ownership is increasingly becoming a thing only for older and/or richer Brits. In 1993, pretty much everyone who had saved enough for a deposit and qualified for a mortgage loan of 4.5 times their salary could buy a house. Now only the richest half (well, 61 percent) can. And while 80 percent of 65-74 year olds own their home, only 35 percent of 25-34 year olds do.
Lots of people are trying to come up with ways to change this. The government set up a ‘Help to Buy’ program which was supposed to give young people extra money to buy a home. A think tank called Onwards has suggested that landlords could be encouraged to sell houses to long-term tenants by letting them off the taxes you normally pay when you sell a house.
But others say that policies like these mostly helps the richest, and those who already own a house, to buy. They think that the best way the government can give everyone a fair chance at owning a house is to build affordable ones in the first place. Cheaper housing would also mean that fewer people have to get into lots of debt to buy their house, which can cause them financial problems if something bad happens, like them losing their job.
… most of us live in a home of friends, family, or with a partner. Our homes are like mini-economies, with their own systems of dividing up work, providing resources, and exchanging skill-sets. Not only do these affect our ideas of who does what on a wider scale, our homes themselves and where they’re located have an effect on the economy around us, and the economy we experience.