When I grew up I remember the Thatcher years more than the decade before. One thing I remember vividly was this sudden shift to home ownership and the ultimate goal being the owning of your own home. In the early nineties I bought my first house, and I felt that I had made it. I sold it a few years later at a loss.
I was 23 when I purchased my first house, my parents were 40 when they purchased they first house. If we fast forward to today, it is expected that the average person will get onto the housing ladder at the age of 40 and as an economy we should be doing everything to open up affordable housing to a younger generation.
This has made me think, are we focusing on the wrong goals?
Go back a few years, we lived abroad when I was growing up and in many of those countries the idea of home ownership was alien and in fact this continues even now. Renting was the norm and for many they would rent the same house for their lifetime. This didn’t seem to cause problems for the economies and in fact some of those economies are stronger than ours!
So I have come through that and can understand that perhaps home ownership is the wrong goal, however for people born in the eighties they will know nothing other than the desire to own their own property as being the ultimate goal.
If we save everything we have to achieve this goal and that takes until we are forty, then we hit a problem because in reality we do little saving after that as we settle into the house, buy things and do it up to our standards. So we can find that by the time we are 45 we may have a house but have no savings for retirement. If we consider it in this way is the desire to own a house the right goal or the wrong goal?
Of course we are under amazing pressure to own a house, and that is why I bought my house but is that pressure creating a dangerous time bomb?
I don’t know the answer to this but it is worth considering. Do we as a nation need to reconsider what our goals are, and if renting should be the norm then perhaps we need to focus on making long term renting more accessible (even lifetime renting) and then people can focus on the right goals.
NOTE: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.