TIME was when home ownership was a really big deal in this country.
Though 100 years ago 80 per cent of Britons rented their homes from private landlords, inter- and post-war housebuilding booms - and a plentiful supply of mortgage deals - meant that by the early 2000s well over 50% of UK homes were either owned outright or part-owned by individuals paying off a mortgage.
It was a Tory dream come true; the realisation of Margaret Thatcher’s beloved right-to-buy scheme - a policy that one-time cabinet colleague Michael Heseltine once gushed would secure the nation’s future by transferring “capital wealth from the state to the people”.
Only somewhere along the line we forgot to keep building more houses and, with supply inevitably failing to keep up with demand, affordability started becoming an issue during the bubbles of the 1970s, 1980s and early 2000s.
Though many would-be homeowners were already priced out of the market as a result, the financial crash came along to finish the job, with bankers seeking to punish their customers for their own largesse by withdrawing all but the least affordable of mortgage products from their ranges.
And here we are. According to figures from estate agency Hamptons International the proportion of over 50s living in rented accommodation has reached a record level across the UK, with those in that age group now accounting for more than 10% of Scotland’s rented households while a third of those are already in possession of their pension book.
It is a trend Hamptons expects to continue, with its head of research Aneisha Beveridge noting that as younger generations are “much less likely to be homeowners, tenants are getting older, and an ever-more diverse group of people are calling the rented sector home”.
It is a cause for serious concern, not just because Hamptons’ figures cover only the private rented sector, where unscrupulous landlords remain a feature, and not because home ownership should be seen as the holy grail in and of itself.
No, it is a concern because at a time when pensions saving is widely held to be at too low a level to last a lifetime the last thing the next generation of retirees needs is another unpredictable expense to have to deal with. As Labour housing spokeswoman Pauline McNeill said, renting in retirement - particularly in private homes where standards can be variable and rents unpredictable - means individuals run the risk of “eating away at their pension and being pushed into poverty”.
It is a good point well made. Indeed, while today’s housing problems can be traced directly back to Thatcher’s right-to-buy scheme - a policy that took millions of homes out of the social rental space without ever doing enough to replace them - her Tory government was at least right about one thing: removing or reducing the need for individuals to come up with rental payments in their twilight years is a sure fire way of increasing their financial wellbeing. Without that comfort blanket, the opposite is true.
A simple solution would, of course, be for all of us to start ploughing more cash into our pensions now in the hope of building a pot big enough to last a lifetime. That may be easier said than done.
There is no shortage of research showing how spare cash has become increasingly hard to come by in the years since the financial crash, with stagnant wages and inflationary pressures meaning even the better off among us are finding it increasingly difficult to make ends meet. So big is the problem that employment service CV-Library reckons over 25% of Scottish workers have had to take on extra ‘side hustles’ just to meet their current commitments. For them, putting aside more in the hope it will make their retirement that little bit less ascetic is simply not an option.
Even if it was, surely there’s a limit to what each of us should reasonably be saving. It’s one thing putting aside enough cash to fund all your future needs, it’s another if that means scrimping and saving in the meantime, foregoing spending the cash when you and your family have the chance to actually enjoy it.
Perhaps the answer lies in building more social housing to continue trying to fill the pockmarks left by the Thatcher era. The Scottish Government has certainly signalled its intention to do so, pledging £3.3 billion to deliver at least 50,000 affordable homes, 35,000 of which will be for social rent, by March 2021. It has even attempted to crack down on the private sector, introducing measures designed to ensure homes are of an acceptable standard, tenancies are secure and tenants’ rights are clear. It is unlikely to be enough.
And, when the public purse is facing well-documented constraints of its own, to the extent that even free care for the elderly appears to be under threat, it looks like the only viable option is to continue doing the bare minimum; to continue storing up yet more problems for the next generation to have to deal with.
It is a legacy none of us can be proud of.
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