Aaron Jacob: We must confront declining rates of home ownership, for across the generations
Every delay has consequences.
Aaron Jacob is a solicitor, and former district councillor. He was the Conservative candidate for Sheffield Brightside and Hillsborough in 2024.
Home ownership in the UK is the dream that is slipping through the fingers of millions.
I have previously shared my thoughts on declining home ownership on this site, outlining in detail how there has been such a dramatic shift in the course of one generation. Recent survey data shows that the average age of first-time buyers overall and in the rest of England (excluding London) was 34 in 2024-25, compared to the pre-pandemic years in 2019-20 when it was 32.
Obviously, this is gravely concerning for younger generations. But on present trends, this shift will be equally consequential for older generational cohorts in both the medium and long-term, as well as for the size of the state.
Home ownership is implicit in many retirement saving models. The Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, for example, assume that retirees will be living in their own home and have no mortgage or rent. This assumption is now colliding with reality. The proportion of privately rented homes headed by someone aged 55-64 increased from 6.3 per cent in 2010-11 to 11.3 per cent in 2020-21. The OBR estimates that the likely projected rise in the pensioner renter population will be from around 6 per cent today to 17 per cent by the 2040s. The Office for Budget Responsibility (OBR) estimate that this alone would result in a £2 billion (in today’s terms) increase in housing benefit spending.
Retirement savings models will clearly need to adjust to these facts. Indeed, Standard Life has estimated that pensioners who rent in retirement could need almost £400,000 more in retirement savings than those with no housing costs. The corollary of reduced home ownership is a larger role for the state: as renters age, either government spending on housing support will rise, or pensioners’ living standards will fall. As many as 400,000 more households could become dependent upon income-related pensioner benefits.
A twentieth-century retirement model is rapidly, but quietly, being eroded before our eyes, with this barely registering on the policy Richter scale. Instead of seeking to address either side of the home ownership-retirement savings equation, Rachel Reeves has opted for the short-term expedient of capping at £2,000 per year the amount that can be shielded from employer and employee NI contributions by using salary sacrifice from 2029.
Reduced rates of home ownership in later life have wider and often underappreciated consequences beyond the public finances. Housing security is itself a determinant of wellbeing in old age. Older renters are more exposed to rent inflation, possible eviction, and …
Every delay has consequences.
Aaron Jacob is a solicitor, and former district councillor. He was the Conservative candidate for Sheffield Brightside and Hillsborough in 2024.
Home ownership in the UK is the dream that is slipping through the fingers of millions.
I have previously shared my thoughts on declining home ownership on this site, outlining in detail how there has been such a dramatic shift in the course of one generation. Recent survey data shows that the average age of first-time buyers overall and in the rest of England (excluding London) was 34 in 2024-25, compared to the pre-pandemic years in 2019-20 when it was 32.
Obviously, this is gravely concerning for younger generations. But on present trends, this shift will be equally consequential for older generational cohorts in both the medium and long-term, as well as for the size of the state.
Home ownership is implicit in many retirement saving models. The Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, for example, assume that retirees will be living in their own home and have no mortgage or rent. This assumption is now colliding with reality. The proportion of privately rented homes headed by someone aged 55-64 increased from 6.3 per cent in 2010-11 to 11.3 per cent in 2020-21. The OBR estimates that the likely projected rise in the pensioner renter population will be from around 6 per cent today to 17 per cent by the 2040s. The Office for Budget Responsibility (OBR) estimate that this alone would result in a £2 billion (in today’s terms) increase in housing benefit spending.
Retirement savings models will clearly need to adjust to these facts. Indeed, Standard Life has estimated that pensioners who rent in retirement could need almost £400,000 more in retirement savings than those with no housing costs. The corollary of reduced home ownership is a larger role for the state: as renters age, either government spending on housing support will rise, or pensioners’ living standards will fall. As many as 400,000 more households could become dependent upon income-related pensioner benefits.
A twentieth-century retirement model is rapidly, but quietly, being eroded before our eyes, with this barely registering on the policy Richter scale. Instead of seeking to address either side of the home ownership-retirement savings equation, Rachel Reeves has opted for the short-term expedient of capping at £2,000 per year the amount that can be shielded from employer and employee NI contributions by using salary sacrifice from 2029.
Reduced rates of home ownership in later life have wider and often underappreciated consequences beyond the public finances. Housing security is itself a determinant of wellbeing in old age. Older renters are more exposed to rent inflation, possible eviction, and …
Aaron Jacob: We must confront declining rates of home ownership, for across the generations
Every delay has consequences.
Aaron Jacob is a solicitor, and former district councillor. He was the Conservative candidate for Sheffield Brightside and Hillsborough in 2024.
Home ownership in the UK is the dream that is slipping through the fingers of millions.
I have previously shared my thoughts on declining home ownership on this site, outlining in detail how there has been such a dramatic shift in the course of one generation. Recent survey data shows that the average age of first-time buyers overall and in the rest of England (excluding London) was 34 in 2024-25, compared to the pre-pandemic years in 2019-20 when it was 32.
Obviously, this is gravely concerning for younger generations. But on present trends, this shift will be equally consequential for older generational cohorts in both the medium and long-term, as well as for the size of the state.
Home ownership is implicit in many retirement saving models. The Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, for example, assume that retirees will be living in their own home and have no mortgage or rent. This assumption is now colliding with reality. The proportion of privately rented homes headed by someone aged 55-64 increased from 6.3 per cent in 2010-11 to 11.3 per cent in 2020-21. The OBR estimates that the likely projected rise in the pensioner renter population will be from around 6 per cent today to 17 per cent by the 2040s. The Office for Budget Responsibility (OBR) estimate that this alone would result in a £2 billion (in today’s terms) increase in housing benefit spending.
Retirement savings models will clearly need to adjust to these facts. Indeed, Standard Life has estimated that pensioners who rent in retirement could need almost £400,000 more in retirement savings than those with no housing costs. The corollary of reduced home ownership is a larger role for the state: as renters age, either government spending on housing support will rise, or pensioners’ living standards will fall. As many as 400,000 more households could become dependent upon income-related pensioner benefits.
A twentieth-century retirement model is rapidly, but quietly, being eroded before our eyes, with this barely registering on the policy Richter scale. Instead of seeking to address either side of the home ownership-retirement savings equation, Rachel Reeves has opted for the short-term expedient of capping at £2,000 per year the amount that can be shielded from employer and employee NI contributions by using salary sacrifice from 2029.
Reduced rates of home ownership in later life have wider and often underappreciated consequences beyond the public finances. Housing security is itself a determinant of wellbeing in old age. Older renters are more exposed to rent inflation, possible eviction, and …
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