WHAT’S SO WRONG WITH RENTING?

By Hattie Turner

As I’ve reluctantly inched closer to thirty, more and more of my friends have become homeowners. Some have now sold their first home and are onto their second. Consequently, I’ve always felt a little behind, still living in a rented flat while others pick out carpets for their spare bedrooms and discuss the merits of the £800 KitchenAid. My biggest purchase this year has been a milk frothier. I don’t even drink coffee, but just fancied having the odd ‘posh’ hot chocolate.

In the UK over the last fifty years, it’s been the default action for adults of a certain age to buy a home. In fact, since 1971 between 50-75% of employed adults owned a house at any given time. Politicians constantly talk about ‘generation rent’ but in reality, we are still largely a country of homeowners. It’s easy to see why. Living in a home that is yours is almost a cultural symbol of having made it. It’s the yardstick by which others measure you against. Come tooth and nail, people scrape together every penny to achieve that revered accomplishment. This is made easier still when government-backed schemes such as the Help to Buy ISA and the newly introduced 95% mortgages means you can essentially buy an entire house for just a few thousand quid. You just have to forget about the crippling 35-year mortgage repayments.

But more than prestige and financial motivation, living in your own space has many more untold benefits. Autonomy being one of them. If I wished to paint the walls bright pink or nail some questionable artwork to the walls, who’s going to stop me? Perhaps I’d like a husky for a housemate. That freedom, albeit acted upon in a slightly different way to these examples, is very liberating, and can be a huge plus for buyers.

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All these positives point towards buying being the logical choice as a long-term accommodation strategy, but - without wanting to sound too Carrie Bradshaw - I can’t help but wonder whether being a long-term renter is so bad? The average house deposit in the UK in 2020 was £47,838. The average rental price in the UK in the same year was £700 per month, meaning you could live in a rented property for nearly six years before you’d paid the equivalent as those with the deposit. That’s without even considering the mortgage repayments, repairs, solicitor and surveyor fees, possible service charges and leasehold fees, all of which hang heavy on the purse strings.

There’s also the argument that flexibility trumps security. When buying, you’re in essence committing yourself to a long-term loan repayment for many years. You’re planted somewhere for the foreseeable future and it’s difficult to just up sticks and leave on a round-the-world tour without worrying about whether the last-minute tenants you found aren’t disregarding your stringent coaster policy.

Besides, don’t think that flexibility only extends to jetting off around the world to find yourself. And whilst the pandemic has changed this a lot, it also used to make you more employable. Unless you’re happy to let your house out promptly, are you stuck to applying for jobs in your direct vicinity, knowing you can’t be too flexible as a homeowner? Perhaps renters and their adaptability give them somewhat of an advantage.

Channelling my inner Ray Liotta, problems are easy enough to solve as a renter:

‘Fancy exploring a different part of the city?’ ‘No problem, I’m renting.’

‘What about the busted boiler that needs fixing?’ ‘No problem, I’m renting.’

‘What about the sudden work transfer to New York?’ ‘No problem, I’m renting.’

Sure, moving house can be slightly arduous. You might look at your new shower and see a complex algebra puzzle. The previous tenants might have left some little surprises for you in the fridge. But when you’ve got a few suitcases full of clothes and a milk frother, it’s not all bad.

Hattie Turner

Hattie Turner

LEVELLING THE PLAYING FIELD FOR HOME OWNERSHIP

By Emma Best

I grew up during the era of Blair on an estate in a deprived area of London. What surrounded me was a generation of vulnerable families trapped on the drip tap of the state, demoralised and resigned to the constraints of life supported by welfare. This shaped my view of politics and the importance of empowering people through policy that, at the earliest point, gives them the opportunity to control their future.

My proposal aims to do this through a reformation of tax policy for young people that would not only make home ownership accessible but also incentivise employment. Under the working title of the ‘Youth Boost’ this policy presents the opportunity to truly put home ownership in the grasp of all young people.

“The cost of living for young people is made more expensive by government intervention and that by taking less away from young people through the tax system, then you would help them save for things like a house.” Chloe Westley

With strong voices in government and throughout the Conservative Party recognising the need to accelerate homeownership and not allow tax to make life unduly hard for young people, the time is right to pitch this policy to sympathetic ears.

The Youth Boost would effectively eradicate basic rate tax for under 25s up to the value of £10,000 by allowing them to claim back these payments for a deposit on a home. Once £10,000 had been accumulated they’d begin to pay basic rate tax again and any higher rate tax would still be paid in a tax year (even if the £10,000 cap had not yet been reached).

While schemes such as ‘Shared Ownership’ and ‘Help to Buy’ opened up the housing market to many who previously found it unobtainable they still exclude those living week to week, or month to month, unable to save at all. Help to Buy, whilst extremely successful, has faced criticism for inflating prices within the new-build market; putting money in the hands of developers as opposed to those looking to climb onto the housing ladder. The Youth Boost would avoid this and with Help to Buy winding down to its end in 2023, now represents the perfect time to invest in this scheme which would truly stimulate social mobility. 

Why £10,000?

The average 18 – 24-year-old earns £22,059 per annum. Over seven years paying tax on this salary your total tax bill would be £10,871. Via a 95% LTV mortgage or 5% deposit shared ownership scheme that would provide a budget to look to buy at £200,000 or, if in a couple, £400,000. The average price of all UK properties is £239,000 (Office for National Statistics, 2020) which puts starter homes within budget. With this price bracket in mind developers will more likely begin to bend towards the needs of young people. The feasibility of young people entering the housing market in large numbers with their purses (or wallets) full also means developers will look to appeal to their needs. In the 80s home ownership sky-rocketed from 57% to 68% by the end of the decade thanks in much part due to Thatcher’s revolutionary ‘Right to Buy’ policy. By the early 2000s home ownership was over 70% but has consistently dropped with the emergence of generation rent. On the watch of a Conservative government we cannot allow this to be our legacy.

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Stable ties to a community create a wide-ranging plethora of social benefits and also increase one’s personal and financial security. In 2020, research released by Halifax showed that homeowners were up to £3,700 better off per year than renters, demonstrating that in the modern age the financial benefit of home ownership is not only realised in the future but also in the here and now.

The existence of large transient populations must be built on the desire to be free to move and live wherever – not an inability to form stable roots through financial insecurity. One of the main benefits of this policy is that it also incentivises entering the working world. For young people the employment market is often unattractive with a prominence of vacancies in inflexible, unstable and low-paid positions.  While there is no silver bullet for tackling the 7% fall in youth employment caused by the coronavirus pandemic, one issue that must be addressed is motivation to work which the effective pay- rise of this proposal provides.  

The big question, of course, is how can we afford it? It’s all well and good talking of spending money to solve an issue – but investing amidst the backdrop of recession recovery is another thing. We must invest in certain areas though, and as we look to ‘build, build, build’ our way to economic stability, this policy would certainly help stimulate the construction industry. The eligible ‘Youth Boost’ accumulated for one person over a year could range from £1 - £7,498. To come to some idea of what this means on a year- to-year basis I’m applying the tax payments from an average salary for under 25s to all 3.51 million under 25s in work. That theoretically presents a total of £6.8bn per annum (0.8% of the UK’s £828bn tax bill) that could – at some point - be reclaimed. The UK currently pays £783,734,400 in unemployment benefits to under 25s each year and this potential boost to employment could help reduce these costs significantly.

Additionally, the UK foots a bill of £18bn per annum for housing benefit. Home ownership provides families with financial security for generations and in decades to come the uplift in asset ownership could foreseeably cause a dip in these payments. The cost of Help to Buy has been £16.05bn so far. The Youth Boost could replace it with previous investment into Help to Buy redirected. It also is true that Help to Buy could begin to realise returns in the future which could be re-invested.

The government could look to separate the ‘Youth Boost’ tax payments and allow the UKGI to manage these in order to maximise potential of the fund before it is paid out. No doubt the scheme would have to be identified as a flagship policy worth investing in. However, even if this policy launched tomorrow claims for £10,000 from every young person in the country would not be made overnight. There’d need to be further modelling to project scale of claims in coming years, but this scheme could be steadily invested in over the next few years in preparation.  

Margaret Thatcher was a trail blazer who smashed down the barriers between class and home ownership with Right to Buy; the foundation of social mobility for a whole generation. It is within our grasp, as modern Conservatives, to take the next revolutionary step. I would implore you to consider the wave of change this proposal could allow for where the surface has only begun to be scratched in this article.

Emma Best

THE ETHICAL INTERIOR DESIGNER

By Selina Seesunkur

On 1 May 2019, the UK Parliament declared a Climate Change Emergency. This has caused a visible push in the production of more electric vehicles to help reduce CO2 emissions, an increase in the reduction and recycling of plastics, and a call to replace old boilers with more economical and environmentally friendly ones. But what does this mean for interior design?  Is it as easy as replacing a halogen light bulb for an LED, installing solar panels, or sending our old furniture to a recycling centre? Can designers and home owners do more?

A recent paper by the Ellen MacArthur Foundation entitled ‘Completing the Picture’, suggests that changes to the five key areas of cement, aluminium, steel, plastics, and food could eliminate almost half of the remaining emissions from the production of goods, or 9.3 billion tonnes of CO2 by 2050. This would be the equivalent of cutting current emissions from all transport to zero.  Furthermore, they argue that switching to the use of sustainable wood instead of polyethylene, and bamboo instead of steel, are also essential moves to further reduce our carbon footprint.

The Reuse Flat in East London, designed by Arboreal, is a good example of creative recycling as all the materials used were sourced from deconstruction sites. The project was to redesign the kitchen, dining, and living room space. The wall panelling and kitchen cabinets are made from reclaimed wood, with broken bricks, concrete and reclaimed wood used to construct the garden walls. Arboreal state that “22% of their materials from the existing site and a further 57% of materials were from reused sources such as the cotton insulation from jeans deposited in French clothes banks and the reclaimed wood floor produced using beams removed from an agricultural building in Orsova, Romania”.

Hard materials such as bricks, concrete, and wood are not the only items that can be used sustainably. Soft materials often used in fixtures and fittings are also going down this route. The Yorkshire based production company Camira have increased their use of recycled fabric, with their new fabric collection Rivet produced from recycled polyester and coming in 3 colourways. Organoid produces carbon neutral wallpaper, with a signature of press flowers, and all materials being sourced as locally as possible. The Italian company Dani claim that their leather lines now have zero impact, claiming that they have reduced their carbon emissions by 5% and, in order to compensate for any other CO2 produced, are taking part in a reforestation programme.  They also claim their processes are innovative and cleaner.

Consumers can also do their part by shopping responsibly and looking at the products and processes that go into making their furniture. We have seen a big movement towards knowing what is on your plate and how it got there. Equally we have seen clothing production questioned and subsequently sweat shops and child labour exposed. Both these areas have made great changes in the way food and clothing is produced, so why not question “what’s in your home”. How many of you have looked at a paint can and reviewed its content for toxins, and bought a different paint? When is the last time you donated a half used can of paint to Dulux’s Community Repaint, which provides unwanted paint pots to schools, charities and housing associations? According to Community Repaint, 387,000 litres of paint were saved in 2012 with 218,000 litres being redistributed to these institutions. Have you ever questioned how your cabinet was made or switched to shopping at a charity shop or re-use centre?  The possibilities are endless, so it’s up to us all to make a conscious decision to make those small changes and not solely rely on the bigger companies like car manufactures, housing developers or supermarkets making the changes for us.

Cllr+Selina+Seesunkur