Here is a sobering fact for anyone under 40 years old who dreams of buying a house in the UK. In the early 1980s, you could buy a flat in Brixton, South London for just over £30,000. That was roughly three times the average wage in London at the time, although unemployment was high at some three muillion adults registered.
Fast forward to 2020 and you need around NINE times the average wage of circa 30K in London to buy a flat in half-gentrified Brixton. It’s the same story outside of London; wages do not match property prices, so getting a mortage is impossible, unless you have a huge deposit of 70K or more.
Why does this matter to the insurance sector? Simple. People who have no significant stake in their property don’t buy insurance. People now are increasingly renting a lifestyle, they never truly own it. As Britain moves inexorably away from owning anything; homes, cars, electric bikes, designer clothing etc our collective sense of responsibility dimishes, in other words, we aren’t quite so bothered if something is damaged, lost or stolen, because we don’t own it.
It still has an impact on our lives, but that impact is reduced as the risk reduces. Everyone in insurance should be concerned by this trend towards rejecting ownership of any sort amongst the young – it spells bankruptcy for a great many of us in the long run.
New research from Engen Group, the UK based innovation and property business which focusses on addressing environmental challenges such as affordable and sustainable housing, reveals that people who don’t own a home but want to in the future, just 55% believe it will happen. One in five (19%) don’t think they will ever achieve this goal and 26% are unsure.
Many of those who anticipate climbing on to the property ladder may have to wait a long-time for this to happen. Some 18% expect to be aged between 36 and 40 before they achieve this, another 18% say they will be between 41 and 50 years old, and 10% think they will be older than this.
For those people who expect to eventually own their own home, many are waiting for life changing events to happen. For example, 22% say they need to be in a serious relationship, 14% want to have a child first and the same number (14%) are waiting for an inheritance.
Graeme Boiardini, CEO of Engen Group said: “It is sad to see so many people having to wait until middle age or older before they think they can get on to the property ladder. More needs to be done to increase the supply of affordable housing so that people don’t have to wait for an inheritance or get married and have two incomes to do this.”