The London housing crisis explained by Alternative Home.
Everyone knows living in London is really expensive, but how much money do you really need to live here?
If you want to buy a house in Camden for example, you’ll need 19.6 times your income to afford it.
Ten years ago, you would only have needed 7.7 times your income. That’s two and a half times more!
Housing has become less and less affordable: from 1997 to today, rent in London has tripled.
To buy a house, you now need five times more than you did ten years ago. So how did we get here?
In 1945, new social housing programmes started involving local authorities. Lots of people started moving into them.
At some point, over a quarter of the UK population lived in this kind of housing.
In the mid-50s, conservative governments started devolving social housing to the private sector.
Margaret Thatcher’s government changed the UK housing system for good.
The Right-to-Buy programme allowed council tenants to buy their home at a generous discount.
Sold off council houses were not replaced, creating a shortage in social housing.
The Bank of England slashed interest rates and mortgages became cheaper.
More people borrowed and amateur landlords bought second homes to rent them out.
A couple of years later, Right-to-Buy 2.0 was introduced by David Cameron. Sales of council houses increased by 400% in three years.
It’s still on today!
On top of this, overseas property investors, London’s rising population and a shortage of new homes made housing prices soar.
The average millennial now has to borrow from the bank of Mum and Dad in order to save enough deposit to get a mortgage.
The Generation Rent are those who cannot rely on the generosity of their parents.
They are locked out of homeownership, but unable to qualify for social housing.
Luckily there are other alternatives housing solutions. Check out our website.