Generation Rent – why the future scares me.

Generation Rent – me? No. Not me.

£30 a week I paid at 18 for halls of residence accommodation on the 9th floor of Wearmouth Hall in Sunderland, pre-demolition obviously.

£120 a month, which included breakfast, evening meal and all utility bills.

My student grant was a £1000 per term, meaning I’d have about £50 a week to live on – mainly books, beer and kebabs post-beer.

I thought I was hard up but looking back again to 1983, £50 a week seems positively wealthy.

My first house was bought in 1988 in Shaw, Oldham, a very modest 2 up 2 down on a main road, with noise intrusion and regular intrusion from burglars. It cost £18,500 and my mortgage veered between £80 to £200 a month when interest rates soared to 15%.

My teacher salary of £481, after mortgage payments and the like, was shorn to £30 per week, meaning I was worse off working than when I was a mulleted student.

There is a point to this blog so bear with my anecdotal ramblings – Generation Rent, the title, is coming.

Various house moves, doubling of income through marriage, and mortgage capital increases – along with rising teacher income (which has not risen since the Blair-Brown government and hands are wrung as to why teachers jump ship) led to more than £30 being available to spend per week.

The arrival of children in our lives meant the need for bigger properties and bigger mortgages.

But children are now what alarm me.

Not children as such – they didn’t make me leave teaching – but my children.

If my eldest, now 15, was to secure a decent job on an average salary, before or after university, on say £15,000 per annum, his mortgage funds (excluding deposit) would be capped at, I guess, £60,000. What would that buy here in east Norfolk, assuming he wanted to remain?

Answer: not a lot.

So he is Generation Rent, but reading an article just about rent, in The Telegraph by Paula Higgins, CEO of the Homeowner’s Alliance, alarmed me further.

Average rent is now £792 a month and that is not just in London; Manchester rents are soaring as demand outstrips supply.

Could he afford this?

No.

My daughter, 10 (age not her name), will presumably be worse off when she flies the nest.

So what is to be done?

Is the answer:

  • More social housing?
  • More shared equity schemes? I saw new build houses in Newcastle upon Tyne selling for £36,000.
  • Or pray for house prices to crash?

Obviously house prices are insane in my opinion and for the good of my children, they need to fall, but here’s the rub:

Property equity is a part of my retirement pot, so I think I need now to prepare myself mentally for the children never ever leaving home.

And then hope, against hope, that some new party, leading this divided nation, will tackle this hornet’s nest and consign Generation Rent to the dustbin of history.

 

 

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