UK Politics

If even super-affluent professionals like me are struggling to afford a house our economy is flawed

BY Abchurch Lane   /  27 October 2020

I am much, much more fortunate than most people. In my early thirties, I earn several times more a year than most people will at their height of their careers. I pay more in income tax than the average household income. Combined with my partner’s income, we probably sit in the top 2% of the country. Yet even to us, the generational divide in standard of living is sharp.

We are fortunate enough to own a home, something I know many of my contemporaries have given up hope of doing.  Yet it is a smallish apartment in a part of London you once only set foot in if you were a fan of urban decay or dog-fighting.  A young professional in the ‘90s in with a similar relative income would never have considered living here, and if the had they could have bought a house for a year’s salary. Now a two-bed flat will cost close to half a million pounds.

Certainly, the impact of the pandemic on the housing market may have arrested London’s soaring prices for now, but it in the longer run the current economic crisis will only put a mere dent in several decades of rises.

For the next stage in our life, things look starkly unaffordable. If we had two children, and wanted them to have a bedroom each, we would have to quit the capital. A three- or four-bedroom house in London would require me to double my salary; a place in a more fashionable part of town, edging into Zone 1, where colleagues a few decades older bought their homes with ease as young couples, would need me to quadruple it.

Even when we do move further out, it will not be to a sprawling pile. The contagion of London house prices has spread to anywhere reasonably commutable, making even modest family homes in many places highly expensive. Short of a windfall or inheritance, the goal now is comfort not luxury.

What were once the trappings of the well-to-do professional have now become the preserve of the super-rich. Older colleagues can boast of a London place, a bolt-hole in the country, even the odd villa abroad or buy-to-let. Their children attend private schools, and generally their spouses do not need to work. Little of this will be attainable to me, and there will be no defined-benefit pension at the end of it.

I say none of this to illicit sympathy, but rather to highlight the absurdity of the challenges my generation face. When even the very highest earners cannot afford to feel comfortably off, those lower down the economic scale will suffer even more. My career will at least grant me a stable home and a decent retirement income. Even average earners of my age face a lifetime of housing insecurity, and a real risk of poverty in retirement.

The vast rise in property prices across the country, but especially in the capital, has affected us all. It has made one of the essentials of life unaffordable and given a tax-free bonanza to those who bought at the right time. I will weather it better than most, but still the lifestyle that someone with my career trajectory would have had twenty or thirty years ago is now only available to those with another naught at the end of their pay packet or family wealth to fall back on.

Those who were in the right place to profit from soaring property prices have ridden the wave to riches whilst those born in the nineties and later find the lifestyle they might have hoped for out of reach. Now just to get by in some comfort off your own endeavours requires a very high wage, and a middle income no longer cuts it as enough.

Trying to build stable a family life in London on a low income must seem impossible. The houses around me, built for manual workers and dockers can now only be bought by bankers. Already swathes of the capital are inhabited only by the super-wealthy and those in social housing.

Such a situation is unsustainable. Where even the most aspirational and successful find diminishing returns compared with previous generations, something must break. The support for Corbyn’s radicalism found its most fertile home in the disenfranchised middle-classes, and capitalism can have little hope if even the best-off struggle to accrue capital. An old adage goes that you know the market is over-inflated when your barber is giving you stock tips – but what does it mean when investment bankers tell you they can’t afford a house?

Abchurch Lane is a former lawyer who now works at an investment fund in the City of London. 


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