Jilted Generation E-Book

Ed Howker

• Herausgeber: Icon Books
• Kategorie: Geisteswissenschaft
• Sprache: Englisch

Seitenzahl: 301

Veröffentlichungsjahr: 2010

Beschreibung

Why are so many adult children living still living with mum and dad? Why do young people seem so disinterested in politics? And what are the hidden threats to Britain's long-term prosperity lurking in the next few decades? First published in 2010, Ed Howker and Shiv Mailk's Jilted Generation answers fundamental questions about the society you thought you knew. It identified, for the first time, the perilous position of Britain's young adults and, with a title brandished by everyone from Ed Miliband to student protesters, the book's thesis has formed a controversial but essential part of Britain's political debate. With significant additional material, this edition updates the argument and explains the real effects of austerity policies and the recession. And, crucially, it explains what must be done to protect a vital and underestimated national asset – Britain's newest adults.

Leseprobe

Jilted Generation

How Britain Has Bankrupted its Youth

Ed Howker and Shiv Malik

Published in the UK in 2010 by

Icon Books Ltd, Omnibus Business Centre,

39–41 North Road, London N7 9DP

email: [email protected]

www.iconbooks.co.uk

This electronic edition published in 2010 by Icon Books

ISBN: 978-1-84831-236-4 (ePub format)

ISBN: 978-1-84831-237-1 (Adobe ebook format)

Printed edition (ISBN: 978-1-84831-198-5)

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Text copyright © 2010 Ed Howker and Shiv Malik

The authors have asserted their moral rights.

No part of this book may be reproduced in any form, or by any means, without prior permission in writing from the publisher.

Typeset in Plantin Light by Marie Doherty

CONTENTS

Title

About the Authors

Dedication

Introduction

Chapter 1: Housing

Chapter 2: Jobs

Chapter 3: Inheritance

Chapter 4: Politics

Conclusion

Notes

Acknowledgements

About the authors

Ed Howkeris a journalist atThe Spectatormagazine and before that worked on current affairs documentaries for Channel 4’sDispatchesprogramme.Shiv Malikwrites for theSunday TimesandProspectmagazine and is a regular broadcaster. They are both 29 and live in London.

To our parents, thank you.

INTRODUCTION

Like all demographic change, the decline in childbirth carries both plusses and minuses. The crime rate ought to fall, since the 16–19 age-group includes the highest number of offenders; but that may be offset by a falling off in young recruits for the police. The young will suddenly find themselves much more sought-after. Universities and other places of higher education may be forced to lower their standards of entry. Employers will have to compete for them: the blight of youth unemployment should start to lift. Their wages, which in recent years have been falling behind, may accordingly burgeon.

‘When the springs of youth run dry’, leading article,TheGuardian, 6 April 1988

Perhaps this is a book about coincidence, an unconnected series of unfortunate events. Human nature is such that we seek out simple shapes and narratives for our lives where there are none; we try to impose order on happenstance and accident. We look for heroes and villains. Stories comfort us. They give us someone to blame.

If nothing else, you could say that coincidence is painted thick onto the lives of those born in September 1979 and afterwards. Theirs would be the first generation to receive student loans and be compelled to pay tuition fees while their contemporaries, born just weeks earlier, and who therefore entered school a full year beforehand, would pay nothing. That they would start their university careers in the very year when property prices began their skyrocketing trajectory far beyond the future incomes of Britain’s young workers seems unlucky. And that they will spend the next 30 years of their working lives paying off implicit government debt, and the very explicit deficit, seems somehow ill-fated too. And this, of course, assumes that they get a job, since many of them are joining the employment market following the worst recession in decades.

But what if these observations, many of which seem to be the concerns of the best-educated and richest young people, barely scratch the surface of the peculiar predicament in which an entire generation now find themselves? What if their disparate problems are linked and are getting worse? And what if the forces that shape their lives and their hardships – real or imagined – have been gathering pace and power for several decades so subtly that they are almost imperceptible today? Sometimes the only retort that seems to make sense is the one their parents offer: stop whingeing, stop complaining, just get on with it.

These, more or less, are the questions that have shaped this book, but to answer them fully is an almost impossible task. The post-79 generation have already lived through an era of momentous change. A ‘Cold War’ between Britain, its allies, and communism melted away before the oldest of them were teenagers, only to be replaced by unpredictable but frequent real wars in the Middle East and Asia. By the time that generation took GCSEs, the internet was beginning to change for ever the terms and opportunities for communication. And over the course of their lives digital innovations have led a rapid evolution in the means of manufacturing, service provision, and the nature and frequency of human interaction. Further, a political and scientific movement embryonic at their birth had pushed environmental concerns to the forefront of people’s lives by the time they reached adulthood. It’s all but impossible to measure the effect of so many complex forces on an entire generation’s lives. So, we’re just a page into this book and already we’re forced to admit that it’s not going to tell the whole story. For example, in the following pages we don’t examine environmental issues in any detail. We don’t trace the cause of feminism and try to quantify its effect on the freedoms and opportunities of women; we don’t examine fully the impact of technology on the lives of young people, or even what numerous irregular and often contradictory education reforms have meant for them. Others have explored these trends better than we ever could. We don’t even have a particular qualification for investigating this subject, apart from the fact that we’re members of that post-79 generation.

So what are we looking at? This book examines four basic areas that form the foundation of people’s lives regardless of which generation they’re born into: Housing, Jobs, Inheritance – how wealth is transferred between generations – and Politics. There’s another good reason for confining the terms of this book to these areas. These four subjects are easier to compare between generations, and we’re going to need to do that if we’re to establish whether Britain’s young adults really are having an unexpectedly rough time. After that, we’ve tried to piece together what has happened and what can be done to fix it.

As you might have guessed from the title, we don’t think our generation have been treated very well. We think they’ve been jilted – cast aside. What we tell in this book is a tale of neglect – not by our parents’ generation (if anything, they’ve often been left to pick up the pieces), but by British society more generally. Perhaps that sounds strange. Believe us when we tell you that the story is about to get a whole lot stranger. But before we dive deep into the weirdness we’d better explain exactly who the jilted generation are.

Meet the jilted generation

The most recent measure of Britain’s population comes from 2008.Figure 1shows us the shape of those generations alive today.

Figure 1. Population by age, 2008 (Office for National Statistics, principal population projections).

The spike at the far right-hand side is a crude lumping together of everyone over the age of 90. Working leftwards, the next spike – occurring between the ages of 56 and 63 – shows the ‘first-wave baby boom’. This spike occurred in all Western countries following the end of the Second World War. There was a return to the stability of peacetime and soldiers came home from battle. Men and women got physical. So physical, in fact, that the matrons working for Britain’s newly nationalised health service could barely cope with the number of new births. In America that boom carried on for the next twenty years, but in Britain it slowed down, rising again only between the years 1956 and 1965 in the ‘second-wave baby boom’. Since then some have died and others have migrated, but today in total there are 16.7 million baby boomers in Britain.

What about the jilted generation? The line we draw for our generation isn’t completely arbitrary. We are the children of the baby boomers, the so-called ‘boomer echo’ – a smaller lump that begins in 1979 and continues until 1994 – and there are around 13 million of us. Between these two generations are 11 million members of the so-called ‘Generation X’. It’s worth stating at the get-go that all these generational divides are far from exact, and we’re not going to pretend that there are too many similarities between members of each cohort.

Age of the aged

Of these three generations, the largest by far are baby boomers, and their sheer size has some wide-ranging implications for our society. Britain has an ageing population and this is creating a demographic trend that is completely new: the ratio between the old and the young is imbalanced.Figure 2shows a second graph taken from government predictions, estimating what will happen in the next twenty years.

Figure 2. The balance of old and young in Britain, 1971–2031 (Office for National Statistics, principal population projections).

It’s easy to think that Britain’s birth-rate or immigration explain why the UK population is growing. However, it’s clear from this graph that between 1971 and 2031 the main factor driving up the population is that people aren’t dying at the age they once did. The population aged under 45 remains broadly stable. But as the population increase over that 60-year period hits 15 million, there are predicted to be 11.5 million extra people aged 45 or older. And, since there are so many baby boomers, Britain’s elderly population will also increase dramatically. By 2040, there will be 10 million over-75s, while the ranks of the super-old, aged over 90, will increase by 390 per cent as the first-wave boomers try to make a century as fit as ever. Over in Whitehall, government has been slowly waking up to the implications of all this. In 2009 a Treasury report on the generations warned:

UK demographic developments … could potentially put direct pressure on the public finances through impacts on age-related expenditure, such as state pensions or health care. Demographic developments could also potentially have implications for the relative size of the workforce and economic growth, thereby indirectly affecting the public finances.1

In other words, Britain’s ageing population could be storing up a whole heap of trouble for our generation who, in the forthcoming era of rising pension and healthcare costs, will be covering these costs on their behalf. What’s more, there will be fewer of us working, so we’ll have to pay proportionally more of our income in tax. Besides rising pension and healthcare costs, it’s easy to think of a few more effects that the ageing population might have: as people get older they’re unlikely to give up ownership of businesses and assets that might naturally have flowed down to younger generations in earlier times. Our economy might begin to skew a bit more directly towards older people’s interests and buying habits. We shouldn’t resent this. The Rolling Stones reached number one in the UK album chart yet again in 2010. We’re getting used to it in the charts – we should be aware of the effect elsewhere.

But one of the most interesting aspects of population trends is that we haven’t been aware of them. That’s odd: broad demographics are fairly easy to predict – you know that if you have a great deal of children in one year, you’ll have a large number of pensioners 65 years later – but the consequences of the spikes and booms seem somehow to have been swept under the carpet. In the course of researching this book, we discovered something very interesting: the Treasury began publishing long-term public finance reports only in 2002. We don’t know why the UK exchequer didn’t do this earlier, but you get a sense of the severity of the situation they discovered from their very first report: ‘One of the key challenges facing the Government is the ageing of the population’, it said. ‘This trend will have profound effects on Britain’s society and economy over the coming decades.’2

Britain’s professional civil servants are known for their diplomatic language and delicate phraseology, so when they use the term ‘profound effects’ you know something might be about to go horribly wrong.

Lifestyles of the poor and aimless

But actually this book isn’t just about the forthcoming ‘age of the aged’ and those ‘profound effects’ lurking around the corner. What we’re interested in is the way our generation are living right now: our employment prospects, the homes we return to when work is ended, how much tax we pay and what that tax is paying for – the rudimentary issues.

We wanted to understand why the unemployment rate for young people began to rise long before the recession – in 2005; why 25 per cent of 16–17-year-olds were out of school and out of work at the height of the last economic boom. We needed to know why young people are spending a greater proportion of their income on rents than at any time in the last 30 years, and why Britain could enjoy a decade-long surge in house prices while the number of young first-time buyers fell through the floor. We tried to appreciate why we’re paying our taxes to service a national debt that’s potentially five times bigger than Britain’s Gross Domestic Product. And why, when Britain enjoyed the greatest boom in living memory, young people’s wages stagnated while the rest of the population’s soared.

It turns out you don’t have to cast your view forward to 2031 to get a sense of the severity of the jilted generation’s predicament. And even more curiously, these difficulties are shaping not just our lives but those of our contemporaries across the developed world. The Organisation for Economic Co-operation and Development (OECD) finds that across the world’s richest nations the young are more likely to be poor today than at any time in the last twenty years. There’s a gathering sense, in fact, that our interests are being cast aside.

France’s 2006 riots, in which Parisian students were teargassed by police for the first time since the late 1960s, came about for precisely this reason. One UK reporter on the scene, Angelique Chrisafis, described the chaos:

The young rebels are fighting not for change but for the status quo – they want the same rights and benefits their parents enjoyed. They do not put flowers in their hair, but take to the streets with nooses round their necks, carrying mock gallows or coffins, chanting, ‘We are disposable pieces of shit!’3

Germany’s response to the issue has been somewhat more considered. They have set up a ‘Foundation of the Rights of Future Generations’ to address the problem of age-based wage disparities and the political exclusion of young people. And the issue is just beginning to gain momentum in the United States, where researchers have uncovered one statistic that says it all:

Young men (aged twenty-five to thirty-four) with a high school degree or less earned about $4,000 less in 2002 than in 1975 (with earnings adjusted for inflation). Men with some college education also lost ground, earning about $3,500 a year less.4

This book doesn’t examine the jilted generations in other countries, however. For one thing, the specific circumstances of any generation vary from one nation to the next. For another, while there has been plenty of discussion about ‘baby boomers’ and their legacy in Britain, no one has fully focused yet on the people really losing out: us.

The postponement of adulthood

The most pernicious aspect of young people’s losing out is not material loss. It’s unfortunate if young people have less money, but we’re young – we can always earn more. The trouble is that by making employment and housing and taxation more difficult for young people to handle, a whole series of spin-off problems of a much more disturbing nature are created.

In the first place, these early imbalances create a kind of engine of inequality within our own generation. While young people from wealthy backgrounds are able to weather the tumult of their early years – they’re supported through the bad jobs and high debts and expensive housing by their parents – the poorest have no means of escape. For too many of them, poverty and a lack of opportunity will therefore be further entrenched in their first years of adulthood.

There is another effect. Quite simply, young people aren’t allowed to grow up. The postponement of adulthood doesn’t refer to technological progress – our generation nearly all have iPods, computers and mobile phones. It doesn’t represent young people’s engagement with fashion or culture. Adulthood encompasses much more basic ideas: family, savings, community, realising ambitions and ideas, stability, even having children. And all these are connected by narratives – those vital stories humans construct for themselves.

As this book works through the home and employment markets, a powerful trend emerges of young people who have no narrative to piece together. We work in jobs and live in homes secured on short-term contracts; the steps of our lives are constantly meandering. We’re not settled. Indeed, for many of us, only our childhood homes represent a fixed point, a permanent address, and so we return to them constantly and sometimes permanently. And all this holds back the start of our own lives, the forming of stable relationships and the mastering of our own destinies. Richard Sennett, the pre-eminent sociologist at the London School of Economics, has diagnosed the trend: ‘The conditions of the new economy feed on experience which drifts in time, from place to place, from job to job’,5he explains. He argues that getting jobs and sticking with them are vital to the ‘adult experience’; but since so many young people are stuck working for agencies and in temporary posts, this doesn’t happen.

Sennett opens his bookThe Corrosion of Characterwith the following dilemmas: ‘How can long-term purposes be pursued in a short-term society? How can durable social relations be sustained? How can a human being develop a narrative of identity and life history in a society composed of episodes and fragments?’6

We don’t ask them ourselves; rather, these are the questions loitering in the shadows, silently following each member of the jilted generation. Take, for example, the effect of over-priced housing. In 2009, 29 per cent of men and 18 per cent of women aged 20–34 were living with their parents.7Unsurprisingly, polling strongly suggests they find it difficult to form and maintain relationships at home. Polling also suggests that up to 2.8 million people aged between 18 and 44 are delaying children because they can’t obtain affordable housing,8while 7 per cent of adults aged between 18 and 30 are delaying marriage because they can’t afford to buy a home. That figure represents the equivalent of 385,000 couples – three times the number of marriages in a single year – postponing their wedding for want of somewhere affordable to live.9

Now consider the effect of unstable and poorly paid jobs. Not only do these make expensive housing even more unaffordable but they also come with their own implications. A 2005 study entitled ‘Marriage and Globalisation’ discovered that job instability has a massive effect on relationship formation in Britain. Women in part-time or contract work were around 60 per cent less likely to move in with their partner than women in permanent jobs. And while job stability had little effect on whether those women converted their relationships into marriage, employment had a big effect on men. As the authors found: ‘Compared to those in permanent jobs, men in seasonal and casual jobs are 88 per cent less likely to convert their cohabitation into marriage and those on fixed-term contracts are 44 per cent less likely to do so.’10

It was once considered certain that couples in Britain had children later only because women chose to concentrate on their careers. Perhaps the relationship between work and income and housing and childbirth is different. It was determined that couples chose to cohabit and marry later because they liked to ‘play the field’ or because the nature of modern relationships was hostile to long-term commitment. Things might be more complicated.

This book will argue that some of the observations we put down to short-term developments and fashions are actually the product of deeper, longer-term trends, and chief among these trends is the mechanism by which our society considers the past and the future – our relationship with time. We believe that this relationship is dysfunctional, not because of ‘the boomers’ or because of the inherent nature of ‘capitalism’ but because of a way of thinking that has grown to dominate our public discourse and our conception of ourselves. It has left us unable to really join up the problems that the jilted generation now face, not because we’re bad or purposefully selfish people, but simply because it never occurred to any of us to look. It’s the reason why Britain has a pensions crisis, why we have huge debts and dislocated young people. It explains why Britain has been unable to equip for the fight the generation now joined in battle against poor public finances. It’s why we’re slowing the rate of childbirth just as our population grows to its oldest.

We can’t see into the future, but these problems have been coming on for a lifetime. In 1991 a New Zealand academic named David Thomson wrote a book calledSelfish Generations?In it, Thomson tried to guess the changes that would take place if the young continued to lose out in an otherwise flourishing society. There would be, he predicted: ‘rising youth crime or suicide, homelessness, poor health care such as neglect of teeth, a reluctance to marry or undertake parental commitment, marriage breakdown, and mounting antipathy to all political processes’.11He certainly came closer to our generation’s predicament thanTheGuardiandid three years earlier in 1988. But to address the underlying concerns we must change our turn of thought, illuminate those shadows, consider looking again.

Slowly, sombrely, inevitably, the storm is gathering pace. Those ‘profound effects’ are waiting to be felt in full force. The generation who will bail Britain out can’t quite get started. The generation waiting to retire are nervously looking on, wondering why. Meanwhile, the debts are getting bigger, jobs are getting scarcer, lives are getting tougher. If circumstances get worse, people will begin looking for simple shapes. They will start to seek out a narrative, any narrative. And then people will find someone to blame.

1

HOUSING

‘I will extend opportunities to people who never had them before. As you know, we are building a property-owning democracy.’

Margaret Thatcher, interviewed inTime magazine, 22 June 1987

‘Over the Parliament our aim is to increase home ownership by one million and in particular help young families struggling to be first-time buyers.’

Tony Blair, speech to the Labour party conference, 27 September 2005

Starting at the top: owning a home

For decades now, politicians have been spoon-feeding British voters the same comforting message: home ownership is good – it helps build a ‘stakeholder society’ as Blair said, or a ‘property-owning democracy’ as both Thatcher and Cameron put it. Just before he became prime minister, Gordon Brown went even further: ‘The problem is that even with the great ambitions of the 1950s or the 1980s, they did not succeed in widening the scope for home ownership to large numbers of people who want it’, he told reporters. ‘I would say a home-owning, asset-owning, wealth-owning democracy is what would be in the interests of our country because everybody would have a stake in the country.’1

Over the last 30 years there has been an observable change in the language, culture and attitudes of British people towards home-ownership, just as the politicians wanted. It’s no longer something people aspire to – they view owning their own bricks and mortar as a right. Home-owning is counted by government as the primary mechanism by which people can save money throughout their lifetime, and as the best way to bind people into their communities and create a stable environment for children.

That stability could also be attained through the rental sector, as it is on the continent, but, as we’ll see, the rules, regulations and costs that govern the rented sector have conspired to ensure that tenants are always second-class citizens in our property-owning democracy.

If you’re looking for some measure to show how intensely home-ownership has been hard-wired into Britain’s national psyche, just look at Britain’s prime-time TV slots, ‘dinner-party conversations’ and newspaper front pages. They are fascinated by it. It’s a national obsession, but not one in which our generation can be involved. We can’t afford it.

Part of the explanation we’ve received for being kept out of home-ownership is that Britain is in the middle of a ‘housing crisis’. We all know that. The phrase is so ubiquitous that in the last decade it has appeared twice each day on average in one national publication or another.2We’re told that there are many reasons for this crisis – a shortage of land, the growth in the buy-to-let market, the failure to build enough homes, and property speculation that has forced up their price. And in the meantime the jilted generation – the young – just happen to be left out. ‘Hard luck. Sorry. Wait a few years and you’ll be fine’, everyone else might as well be saying.

If this ‘crisis’ forms one half of popular discussions about housing, the rest comes from the personal experience of Britain’s opinion-formers and commentators. And, no surprises here, it’s the jilted generation they have in their sights.

Scores of newspaper columnists have warned of the unhappy effect of ‘boomerang kids’ who return home to live with their parents after university on the household income. Others have exhorted parents to ‘do the responsible thing’ and ‘kick out the KIPPERS’ – ‘Kids In Parents’ Pockets Eroding Retirement Savings’.

We’re told that we’re freeloaders. And even acronyms created by sympathetic think-tanks to diagnose our problems in novel ways, like iPod – ‘Insecure, Pressurised, Overtaxed and Debt-ridden’ – are turned against us.

‘Were these iPods’, grumbled the columnist Giles Hattersley3in aTimesarticle entitled ‘The Indulged Generation’, ‘not the same lot who choose to study away from home, marry in their thirties and spend the decade their parents raised their children in, chasing dreams and drifting from career to career? How can it come as a surprise to any of them when they can’t afford a house?’ Concluding, Hattersley says that this peculiar acronym should be re-christened to reflect the true nature of our generation: ‘Infantile Posse of Over-indulged Drunks’.4

We’re told that all this is our fault. Our generation is seen as so feckless that there’s even a BBC2 programme,Bank of Mum and Dad, in which ‘grown-ups’ concerned about their children’s lifestyle perform the financial equivalent of an alcoholic’s intervention to attempt to put them on the straight and narrow.

And just in case we might wheedle our way out of such criticism by pretending our circumstances are different, pre-eminent scientists like Kenan Malik are only too happy to explain: ‘The idea that you [Britain’s young people] are uniquely disadvantaged seems to be absurd.’5

In the following pages, we’ll begin to present a rather different picture. We’ll explain what’s actually going on in the housing market, the facts behind how our parents’ generation got their own houses – facts that have been conveniently swept under the carpet like an embarrassing family secret – and we’ll try to pin down who and what is to blame for the disaster that is modern British housing.

Let’s start with a no-brainer. Figure 3 shows that since 1949, house prices have, with the odd blip, risen fairly consistently. The graph isn’t in ‘real terms’, so it’s not adjusted for inflation (we’ll come to that). What it shows is that if you bought for £1,911 – the average house price – in 1949, that house would have risen in value to £2,530 by 1960, and in 1990 the same house would be worth £60,000. Today it would be £226,064.

Figure 3. Average house prices since 1949 (Department of Communities and Local Government (DCLG), table 502).

Gazing knowingly at these figures, perhaps the older generation can take some comfort that prices were cheaper twenty years before they bought their first house, just as they were cheaper in 1990 than now. They suffered the same trouble, they might argue. It’s always been tough. And they might have a point – earning enough to buy your own home is a real struggle. People make sacrifices to do it. Earlier generations sacrificed to buy knowing that a stable home would be a good investment for their savings and their family. Now we, they argue, must sacrifice too – and what’s more, we should quit whining about it like the ‘over-indulged drunks’ we are. But this graph masks the real facts.

Behind the curtains

If Britain’s political leaders wanted to create that ‘property-owning democracy’, then critical to the project was ensuring that young people could get into the housing market quickly. And, twenty years ago, that seemed to be working out OK. In 1990, if you went around Britain knocking at every home, you would discover that 8 per cent of the owners were under the age of 25, and that 43 per cent were aged between 25 and 34. Young people, in other words, accounted for more than half of all home-owners. Repeat the experience twenty years later and what you find is a remarkable change: just 2 per cent of home-owners are under 25, and 27 per cent are aged 25–34.6And this change is far too large to be explained by demographics alone.

Now instead of going around to everyone’s house, imagine going around to every single bank and building society and asking them who they’ve been giving mortgages to in the last twenty years.Figure 4measures the age of mortgage borrowers during the greatest era of easy credit in history. As you can see, despite outrageous 90, 100 and even 125 per cent mortgage offers, the proportion of young people with mortgages fell for both the under-25s and the 25–34 group, from around 62 per cent of total borrowers in 1990 to just under 42 per cent in 2009. Meanwhile, borrowers in the 45–54 age range have gone from making up 10 per cent of the mortgage market to 18.7 per cent.

Figure 4. Mortgage borrowers by age, UK (DCLG, table 537).

If you narrow this picture of the total mortgage market right down to just those mortgages given out to first-time buyers, you can see a similar pattern. In 1990 under-25s made up 30 per cent of the first-time buyer market. By 2009, those first-timers made up just 15.9 per cent of the market. The rate halved. Meanwhile, in the demographic 25–34, there has been a gain in the number of buyers of around the same proportion. The facts are pretty conclusive: first-time buyers are buying later.

So why is this? The Council of Mortgage Lenders thinks it has something to do with lifestyle choices. ‘More young people going to university and trends towards later marriage and child-bearing, mean that people are delaying their house purchase decisions.’7

It’s a view shared by the government. In 2009, the Office for National Statistics’Social Trendssurvey stated: ‘Various life-style changes may have contributed to this pattern [of ageing first-time buyers]. For example, people are now generally marrying later in life than they did ten years ago. In addition, more young people are going to university and some leave home to live in shared accommodation before setting up their own homes.’

It seems like a persuasive argument. Buying a house just isn’t what young people do these days. But maybe something else is going on. While some of us may be genuinely waiting longer because we want to explore the options, most of us still want to own a house. When MORI conducted a poll of people aged under 25, 84 per cent responded that they would be likely to want to buy their own home within the next ten years.8

So, if we really want to own a home, is there another reason that would explain why our generation is waiting longer than ever to get in on the act? Of course there is. It’s not just that homes have got more expensive, it’s that they have become disproportionately expensive. Outrageously expensive. Expensive in ways that some people won’t admit, and that the first graph in this chapter can’t hope to express. We’re going to need more graphs …

The data inFigure 5is drawn from the government’s own figures and, as you can see, represents more clearly than ever how our generation has been, and will continue to be, doinked.

Figure 5. First-time buyers since the 1970s (UK house price and income data from DCLG).

The line that reaches the highest point represents the average price of a home in the UK. As you can see, costs have exploded in the last 40 years. If food costs had gone up as fast as house prices, a pint of milk would cost £2.43, a jar of coffee would cost £20.22, and a chicken would cost £47.50 (and that’s a standard battery chicken, not an organic, sandal-wearing chicken).9To put it another way, if in 1970 you invested £4,975 – the average price of a house – into the housing market, you’d get back over £220,000 by 2009. If you put that money into a bank account that rose with the price of everything except housing – fuel, clothes, food, cars – you would receive around £50,000.

The next line down is the typical price that first-time buyers have been paying for a house over the same period. You would expect it to be below average because first-time buyers tend to start at the bottom of the housing ladder. Of course the wider the gap between the average price of a house and what a first-time buyer pays, the lower the standard of home those first-time buyers are likely to get. The gap between the two has been widening. In 1970, first-time buyers were getting houses costing 13 per cent less than the average. Today, their homes are 27 per cent less than the average. The bottom of the ladder has been moved even lower. (We come on to just how pitifully low in a few pages.) However, housing inflation, like all kinds of inflation, isn’t a problem if wages also increase. As long as wages and prices remain roughly in proportion, then all this needn’t be much of a problem.

The bottom line in our graph is the combined income of those first-time buyers and their partners. For us to get the same deal as those buying housing at the start of the 1970s, you would want the gap between the bottom line and the middle line – incomes and prices – to remain as small as possible over time. In fact, this gap has widened massively.

Figure 6is the same graph with another line added.

Figure 6. First-time buyers since the 1970s (showing ratio of first-time buyer house price to income).

The dotted line represents that ratio of first-time buyer house prices to incomes. What you see is that between 1970 and 1990 the ratio hovers around 2.42. This is the average multiple of what our parents’ generation paid for their houses in their youth – i.e., they managed to get a roof over their head for 2.42 times their income. For our generation, the story is completely different. Between 1997 and 2009 this ratio was much larger, 3.41. And it’s still climbing. Perhaps the difference between those ratios doesn’t sound too bad? After all, what’s a ratio point between generations?