The pursuit of homeownership and the importance of family support Tom Moore (University of Sheffield) Kim McKee (University of St Andrews) Adriana Soaita (University of St Andrews)

Introduction Social policy context Introduction to the research Methods Initial findings Implications 10/11/2018 © The University of Sheffield

The growth and normalisation of homeownership Homeownership has become the ‘normalised’ tenure of choice and a key marker of social difference. “The private ownership of housing has provided a material base for securing homes and accumulating assets, but has also been a key symbolic marker of membership in mainstream society” (Hirayama, 2012: 173) An important source of individual wealth and central to the shift from collective to asset-based welfare provision. But proportionally decreasing in UK as PRS rises. Homeownership has become the ‘normalised’ tenure of choice, a key marker of social difference, and something used to distinguish between ‘successful’ and ‘unsuccessful’ citizens. This has paralleled the residualisation of social housing (generalising) and growth of private renting, with homeownership privileged as the tenure of choice that people are encouraged to pursue. Reflects shifting relations between the state and its citizens. Changing welfare state and individualised welfare provision becoming more fundamental. Accumulation of assets becoming key to future welfare needs. 10/11/2018 © The University of Sheffield

Trends Despite the centrality of homeownership to welfare systems, young adults increasingly excluded. Housing affordability Rationing of access to mortgage finance Young adults increasingly located in the private rented sector: ‘Generation Rent’ Proportion of households aged 25-34 in the PRS has doubled in ten years (21% in 2003/04 to 48% in 2012/13 – English Housing Survey). Homeownership is a lynchpin of asset-based welfare systems, as housing is one of the most significant assets that an individual may own over the life course. Despite its centrality to contemporary welfare systems, young adults are increasingly excluded from accessing it and find that their housing choices are constrained by a set of broader social and economic processes. These may include the affordability of housing, which in many areas has escalated beyond average incomes, difficulties in accessing mortgage finance, and changes to the life course of young adults in recent decades, including longer education careers, student debt, more conditional social welfare provision, and in recent times high levels of unemployment amongst young adults. In this context, and with a limited supply of social housing in many parts of the UK, young adults are increasingly located in the PRS and have been christened ‘generation rent’ by media commentators, implying that they will rent for longer periods of time in the private sector than previous generations. We can see the trends here, which are for England, similar trends can be observed in other parts of the UK – up to 40% in Scotland. 10/11/2018 © The University of Sheffield

Familisation of welfare and housing Extended residence in the family home Housing benefit reforms Societal pressure on baby boomers to ‘give something back’ (Willetts, 2010) Growing reliance on family support for first-time buyers 40% of parents provide family support to the tune of an average of £23k (Shelter, 2014) The term ‘generation rent’ also refers to the differential housing opportunities that this generation experiences compared to previous generations, particularly the ‘baby boomer’ generation. Young adults in the contemporary UK are often expected or assumed to have extended residency in the family home, something which is excacerbated by recent welfare reforms which cut eligibility for support with housing costs such as housing benefit. Specific adjustments to the single room rate and housing benefit have curtailed the ability of young people to live independently if they require support with housing costs. This is all part of a family-isation of welfare, in a broad sense, and housing. There has been much talk in the last few years about encouraging greater family responsibility, as well as encouraging the baby boomer generation to ‘give something back’ to the next generation, based on the premise that their opportunities to accrue wealth specifically through housing were significantly greater. - One way in which this manifests is the growing reliance on family support for first-time buyers. CML did some analysis in 2011 which showed that the average age of a FTB in England without family support was around 37, while more up to date statistics show that 40% of parents provide family support to the tune of an average of £23k per person to support their children in pursuing homeownership. Shelter’s research into the bank of mum and dad showed that many used their own savings or curtailed their own spending to support children, and it is the negotiation and exploration of these transactions and relationships that we are interested in. 10/11/2018 © The University of Sheffield

The research Mind the (Housing) Wealth Gap, 2012-15 funded by the Leverhulme Trust. Qualitative study looking at: The attitudes and behaviour of young people (aged 18-35) surrounding inter-generational transfers of wealth Their expectations of receiving support How this shapes their housing pathways - Durham, Birmingham, St Andrews, Dundee and Essex Universities. 10/11/2018 © The University of Sheffield

The research Nine case study areas across the UK Surrey, Sheffield and Cornwall (England) Edinburgh, North Lanarkshire and Scottish Borders (Scotland) Merthyr Tydfil and Gwynedd (Wales) Belfast (Northern Ireland) 30 x telephone interviews and 10 x focus groups 60 participants in total Geographical skew – recruitment was more difficult in rural areas 10/11/2018 © The University of Sheffield

Initial Findings Perceived legitimacy of housing costs, linked to normalisation of homeownership Emotions of the gift relationship The social cleavages of family support 10/11/2018 © The University of Sheffield

1. Prevalence and understanding of family support Family support prevalent in all case study areas and took different forms Living with parents (especially in high value rural areas) to support saving Help with housing costs Wealth transfers to support homeownership: the majority of home-owning young adults had received some support. Deposits usually understood as gifts, but this creates ambiguous relationships (chiming with Heath and Calvert, 2013) Family support conditional on deservedness and perceived legitimacy of housing costs Firstly, family support was prevalent in all case study areas. While we are concerned with intergenerational transfers of wealth, it’s important to note that family support was interpreted by participants in different ways and took different forms, including living with parents to support deposit saving, direct assistance with housing costs – often through subsidised rents – and more specifically direct transfers of wealth to support young adults purchasing homes. It was particularly striking that just about every homeowner aged 18-35 had received family support of some form to purchase their property. With reference to deposits, these were usually seen as gifts, but their status and perception by the recipients was often ambiguous. We will speak more about this in the following slides, but our findings here chime somewhat with Heath and Calvert’s work in a Southern city in England, whereby wealth was not transferred to children with no strings attached. Often there are tangible or intangible expectations as to how the money will be used and the perceived legitimacy of housing costs; for instance family support with housing costs in our study was often dependent on it being used specifically for homeownership, based on the perception of property as being a ‘good investment’ and welfare resource, while similar support would not be forthcoming for renting. 10/11/2018 © The University of Sheffield

Perceived legitimacy of housing costs linked to ‘normalisation’ of homeownership: “When my Gran died, my Dad sold her house and split the proceeds three ways, and we ended up getting a £50,000 deposit to be used on a house. I can honestly see that just being in the bank for a long time until my Dad dies, and then I can spend it on whatever I want. Isn’t that ridiculous? … In my parents’ day, it was such a thing, you had to do it. And my Dad struggles with the fact we don’t own.” H, Surrey (age 34) “I would hate to and never have asked for help with rent, I’ve never asked for a deposit for a house and I wouldn’t. If my parents turn around to me and say “do you want £20,000 as a deposit”, I wouldn’t turn it down because that would be massively helpful and they would be doing it with the best intentions and I would only accept it if I knew that they were in a position to do it and it wasn’t going to leave them in any financial hardship.” S , Sheffield (age 28) Just to bring this out with some data, the first respondent here from Surrey comments on how her inheritance could only be used for purchasing a home, linked to the normalisation of homeownership. She lived in a particularly affluent area of Surrey but even with a £50k deposit found it difficult to obtain a mortgage for a house that suited her family and housing needs. The second quotation highlights the perceived legitimacy of asking for support with certain types of housing costs. 10/11/2018 © The University of Sheffield

2. Emotions of the gift relationship Elder-Vass (2015) discusses ‘positional giving’, whereby there is “a normative expectation that people in certain social positions will give gifts to certain other people.” This provides the foundations for the ‘gift relationship’, but there are a number of emotions and complexities to the negotiation of this within the family. Following on from this, we explored the emotions of the gift relationship, the expectations and feelings that young people have about receiving (or not) intergenerational wealth transfers. Elder-Vass discusses ‘positional giving’. Positional giving underpins the giving and receipt of family support, but there are a number of emotions attached to this. Few young adults showed a sense of entitlement or expectation that support would be forthcoming, though many understood that parents wished to help and felt that if they wished to improve their position they had no option but to accept family support with housing costs. 10/11/2018 © The University of Sheffield

2. Emotions of the gift relationship “I think it probably feels a bit like you’re tied to that individual, maybe that you owe them … it would be a burden, wouldn’t it, in your head, if that person has subsidised you … Plus when he dies, there is not going to be any money, because everyone’s living longer, then you have to go in a nursing home, and that’s like £1,000 a week for quality care.” H, Surrey (age 34) “I would imagine it’s a massive burden for my parents. I spoke to my Dad about it quite a few times and he stressed he wished he could help, but it’s just … and I don’t like him feeling guilty about it … but I think if a parent can help then they will probably, and parents do take that burden don’t they?” C, Merthyr (age 27) “I’ve got my inheritance but there’s no personal achievement, and I was done there, set me up for life, but you want to feel like you’ve done it and to feel a little bit proud.” F, Surrey (age 21) Financial gifts are not given in isolation from personal feelings or issues within families. They may provoke different emotions which influences the use or acceptance of that money. This person had already received some money for a deposit but had been unable to use it for homeownership due to the heated market in Surrey. Here she discusses how she would hypothetically respond if her Dad topped up the deposit. She mentions the feeling of being tied into a reciprocal relationship marked by unspoken obligations or reciprocations. She also links the use and acceptance of family support to another primary purpose of asset-based welfare: the use of housing wealth for long-term care needs. This raises important and emotive issues that will be negotiated within families in the context of asset-based welfare and familisation of welfare, whether parents are drawn towards supporting their children or to saving for long-term care needs. C from Merthyr also highlights the emotions involved when parents are unable to support children, highlighting again the complex negotiations that may occur over the use of finance and wealth to support children. Imposition of identity and on independence – housing as a key marker of adulthood and transition, and younger adults in the study showed both an acceptance to use resources but a reluctance to see it as their own achievement. They identified a simultaneous state of being both dependent and autonomous. 10/11/2018 © The University of Sheffield

3. The social cleavages of family support It is known that parental homeownership and family affluence influences younger generation’s housing tenure through parental gifts and inheritance (Rowlingson and McKay, 2005; Helderman and Mulder, 2007) The key finding of our study is the emerging social cleavages in housing amongst under-35s in the UK, between those who have access to parental and private resources, and those who don’t. - As well as some geographical differences which we hope to unpick in further analysis and publications. 10/11/2018 © The University of Sheffield

3. The social cleavages of family support We have identified two ways that this manifests: 1. Implicit reliance on family support disadvantages certain family types and social backgrounds “I know for a lot of people it is like their parents can help out, but I don’t think everyone’s parents can, and I think particularly where parents have been divorced, often financially they are not in a position to do that … they are not necessarily as financially stable because again they’ve got to start from scratch in the housing market.” T, Surrey (age: 26) - Exclusion of particular family types and social backgrounds. 10/11/2018 © The University of Sheffield

3. The social cleavages of family support 2. Geography of (un)affordability “When I got that money [£50,000] I thought – this is like four years ago – I thought that was such a lot of money. I thought that is amazing, a £200,000 house now becomes £150,000. But those £200,000 houses are now one bed, two bed. The market has increased so much.” H, Surrey (age: 34) “It was that kind of shelter, living with Mum and Dad, that allowed me to save money to buy a house. That’s how the deposit money was saved. I’m not sure I would have been able to do it if I was out paying market rental rates, in fact I know I wouldn’t, so the only way I was able to stay in my hometown was by living with parents for several years.” S, Cornwall (age: 29) - Even where family support is available, it may not be enough in overheated markets: - Especially the case in some of the higher value areas such as Surrey and Cornwall. T - The key point is the geographical variations in house prices ultimately makes getting on the property ladder harder in some locations than others. 10/11/2018 © The University of Sheffield

3. The social cleavages of family support Lack of family support in areas of (unaffordability) exacerbated in absence of formal provision and intervention “I find that there is no help for people that are working full-time that are on a low wage and that’s a helluva lot of people, and [for] trying to get social or private housing – I won’t go on about buying because you need to have savings and I don’t think that I will ever be able to buy my own home.” YMCA Resident, Surrey (age 28) Lack of family support exacerbates housing crises for many young adults. 10/11/2018 © The University of Sheffield

Conclusions The housing choices of young adults are increasingly mediated by the family and private resources they are able to access, in turn mediating access to particular types of housing tenure, opportunities, and access to popular areas of urban space. Family support is prevalent and usually understood as a gift, but there are many emotions attached to this related to issues of identity, reciprocity, and negotiations as to the long-term use of parental wealth ( long-term care vs. housing). Emerging social cleavages amongst young adults, perpetuated by family support. ‘Generation Rent’ not a homogenous group suffering from similar issues: differential access to private resources risks perpetuating inequalities within and between generations. FINAL POINT: The idea that ‘generation rent’ can be treated as a homogenous group suffering from similar issues should be scrutinised. Inequalities persist within and between generations, and differential access to family and private resource in the realm of housing is one way in which inequalities may be perpetuated. This will have long-term social and economic consequences for a growing number of young adults within the context of asset-based welfare regimes and shifting relations between the state and its citizenry. 10/11/2018 © The University of Sheffield