The shafting of Generation Rent

What have we done to our young people? Those who will carry the baton when our most productive days are behind us.

A previously poorly-acknowledged simmering inter-generational resentment bubbled to the surface during the Brexit vote campaign, when many youngsters felt their future had been sold out by their elders who chose to leave the EU.

But you ain't seen nothing yet. The younger generation's anger has been stoked - and who can blame them? They could get very angry when they hit their forties.

The young are seen by some as either a coddled or under-motivated, waiting generation... sitting back in the expectation it will all fall into their laps one day.

But the trickle-down of property-based wealth dreamed up by Maggie Thatcher in the 1980s will never touch enough strands of society and, indeed, will only further widen social rifts between the haves and have-nots.

The Thatcher effect is being felt ever more keenly after her death than when she was actually in office. This is in part because successive governments (Labour too) have taken her cause on to places even she dared not go at the time.

But this goes beyond family assets. I am part of a generation that thankfully did not live through the war my parents experienced, nor the hardships that followed - there was rationing almost until I was born.

We didn't have to pay to go to university (I opted out but had the chance nonetheless). We chose careers from a smorgasbord of opportunities - turning down many before settling on our chosen path.

And I am thankful I am not starting my adult life now. I see what a struggle it is for my own daughters.

They and many of their friends and their cohort face the prospect of poorly-paid jobs with insufficient hours and often blank weeks with no work at all, while their bills accrue 24/7; they face the chance of leaving higher education with a massive debt burden many will never pay off because they won't earn enough but will cost millions for the state to administer - in the name of saving money.

Many of the jobs that are out there are such that the "living wage" is becoming the going rate; wage stagnation has become entrenched, dragging the economy down. Working conditions are retrenching, with many hard-won rights and perks being withdrawn to pay for even the smallest government-enforced wage hike. Paid breaks could soon be a thing of the past as well as premium pay for working unsocial hours. Don't be surprised if holiday and sick pay comes under threat. Companies such as Sports Direct, with their widely-reported abuses of staff, often using middle-man employment agencies, have shamelessly become too widespread.

Long-term careers are probably a thing of the past as automation threatens to encroach still further into the world of work. I've only once experienced losing a job to an algorithm and it wasn't nice, but such instances will become commonplace. And that's before the robots arrive in force.

Worst of all, there is the prospect of ever-rising rents in ever-decaying, poorly maintained properties, with singles and families never being able to put down any roots or having a place to call home.

And they are afraid to complain about poor or even dangerous living conditions in case they are victimised by their landlord.

They travel light, and never fully unpack, knowing they will likely soon be on the move again. Even council housing terms are to be limited; my mum lived in hers for 50 years. Her neighbours did too. Many of them have stayed in the area they helped to shape and now live in the same secured housing unit. That was community. It is being destroyed.

And what of the next generation buying a home of their own? Not on those wages, or working insufficient and unpredictable hours. Who would lend tens of thousands to someone in those circumstances as it is hard enough to get a mortgage if you are self-employed, which increasing numbers in the UK are, in part out of necessity. Six-figure borrowings, 10 times earnings multiples and non-returnable deposits make for a nightmare come true.

Scariest of all... we - my generation - did all this to them.

This week, the housing crisis has been highlighted in a major report by a think tank. Truth is, not much thinking was required; society has tanked. We live in a perpetual housing crisis in the UK, with too many making too much out of ever-rising house prices for anything radical to be done about it until it crashes and burns.

The last thing those in control of such matters would want to do is to build sufficient affordable homes and depress the bricks and mortar bubble.

And so it goes on, with young people and indeed vast swathes of the population trapped in a world of ever-rising rents and lack of security.

The buy-to-let boom is a scourge. It has replaced manufacturing in this country as a wealth driver and is arguably more toxic than any industrial pollutant.

The number of homeowners is now at its lowest since 1986. It peaked in 2003 when 71 per cent of Britons owned the roof over their head. In February this year, just 64 per cent could make that claim – and a big proportion are the same people who were already on the property ladder three decades ago.

The right to buy council homes, introduced by Thatcher, meant long-term renters in social housing had the chance to become homeowners; the deregulation of the mortgage market made it easier than ever for prospective buyers to find funding to do so. The promise was that the proceeds would go back into building more social homes. But that was the big lie; the big bribe.

A severe lack of investment in social housing over three decades has been compounded by the 2009 global economic downturn, a shrinking of the construction industry and tougher lending restrictions for mortgages. Competition in the private rented sector grew, pushing up rents, meaning renters had less savings for a deposit.

The symptoms are clear.

The next lie was that this was a London problem. New figures have exposed that lie, with many Northern cities becoming unaffordable for homebuyers.

The latest lie is that there is no problem with a generation of people in rented accommodation - after all, Germany does not share our addiction to homeownership.

Most renters in retirement need some support from housing benefit. As rents (even in what little social housing is left) rise in line with inflation and wages, so those reliant on the state pension and their own savings once they’ve retired often need help to keep up. At the moment, that’s only a minority but that’s set to change.

With growing numbers locked out of ownership but unable to qualify for social housing, they are stuck in the high-cost, high-turnover private sector.

More and more housing benefit claimants of working age are actually also in work – they just can’t make it pay. If they are still there in three decades, we’re in for trouble. It was predicted the retirement housing benefit bill would reach £8bn by 2060, with 3.5 million pensioners claiming the benefit. That now seems a wildly low estimate.

It is essential to start building new state homes - on a scale to equal that after the last war. It might well depress house prices, but that will be more desirable than the collapse of the welfare state.

The social degradation of areas where buy-to-lets are prevalent is only too obvious: untended gardens left to run to ruin, paintwork neglected; parents knowing rising rents mean frequent house moves, so it will be long odds their kids will be able to stay in the same school for any length of time.

That will fuel disillusion and crime among that youngest generation, whose own prospects will feel even worse than their parents, who had been brought up with the expectation things would be easier for them than their own parents and the good life would be perpetuation.

But my cohort could well go down as the "stand and deliver generation". The ones who have had it all and even stolen off our own children.

#Housing #Youth #Social