In summary it says that in order for Generation Rent to save for their first home we should reduce our quality of life for the next 5 years. It recommends that we should give up things such as a gym membership, holidays, mobile phone upgrades and takeaways. However, if house prices keep growing in the next 5 years, as they have for the last 5 years then homes would be so out of reach that you would have reduced your quality of life in vain.
The article also fails to include for Stamp Duty and associated Legal Costs which is another affordability hurdle. I wonder what else we must forgo to save for these?
I admit that I had to read the article a few times because I could not tell if it was having a poke at the current housing mess or if it in fact was being sincere. I can only presume now that it is sincere advice to Generation Rent.
Strut and Parker start by stating how important first time buyers are. How nice of them to consider us Generation Rent folk. They then go on to explain that first time buyers are pivotal for a healthy housing market as we provide “fresh capital”, lubricating the housing chains. Without this lubricant, those who already own would struggle to sell their homes and release the paper valuations that they have accumulated.
This made me consider the background of Strut and Parker who are predominantly an Estate Agent (not a Financial Advisor). Estate Agents, you would not be surprised to hear, like an active housing market, the more sales and lets the better. No movement = no fees. Higher house prices = higher fees… you get it.
However, I personally don’t appreciate being advised how many times I can go to the cinema over a 5 year period or that I shouldn’t buy Andrex anymore. Maybe I like Andrex! Especially when the article insinuates that our reduction in quality of life is required to benefit existing homeowners and thus, also Estate Agents.
The problem of the Affordability Crisis is not going to be solved by Millenials who drink Malbec, take an Uber LUX on every occasion and have an excessive quality of life. It will solved be through building more genuinely affordable homes, spreading the economic activity across the UK and regulating the rental market like in Germany.
Share your thoughts.