Why Kirstie Allsopp's home buying views don't add up
Well-paid TV presenter and Baronet's daughter The Honourable Kirstie Allsopp, who is married to a successful property developer, has spoken out on why young people should be able to buy their own houses at 21, just as she did.
The privately-educated alumnus of Bedales School (fees currently £38,130 a year) said, "I do think you have to ask yourself what your degree is giving you.
“Could you get a job at 18, stay at home with [your] parents for three years, and save every single penny, enough for a deposit?”
Citing the 'enormous sacrifices' made by young people of her acquaintance, she added kindly, "I don’t want to belittle those people who can’t do it. But there are loads of people who can do it and don’t.
“We’ve fallen into the trap of saying it’s impossible for everybody." she went on.
" I was brought up to believe owning your home is the be all and end all and in a way I still believe that ... it’s about where you can buy, not if you can buy."
Allsopp, 50, who bought her own first home with help from her father, Baron Hindlip, the Eton-educated former chairman of Christies', back when the average price of a British house was £51,000, admitted that she feels 'enraged' when people say they can't afford to buy a home.
She went on to advise that they could cancel their gym memberships and Netflix subscriptions, and stop taking cheap flights abroad.
"When I bought my first property, going abroad, [and] the easyJet, coffee, gym, Netflix lifestyle didn’t exist,” said Allsopp, who taught in India after leaving school.
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"I used to walk to work with a sandwich. And on payday I’d go for a pizza, and to a movie, and buy a lipstick. Interest rates were 15 per cent, I was earning £11,500 a year.”
Back in 1992, when Kirstie was 21, it would still have been impossible to buy without a deposit and a full time job.
One Mumsnet user took at look at the figures, to see whether for young people, choosing to live at home without a degree, Netflix, a gym, coffee, or the occasional Easyjet flight would allow a young person to buy a house today.
"I'm sure everyone has heard that Kirsty (sic) Allsopp has came out saying that people can afford homes if they only cut out netflix, the gym and takeaway coffees," she wrote.
"I just worked out a meal deal costs £3 a day. X that by 5 days a week, 52 weeks a year is £720. Netflix is £8 for 2 screens, so times that by 12 months is £96 a year.
"Let's add a £20 takeaway every 2 weeks for good measure. £520. Gym costs £14 a month so £168 a year.
"So in one year of cutting back on Netflix, lunch for work and takeaways I can save £1504. Wow.
Now I need 14000 for a deposit so I'm only 10 years away (probably a little but more actually including fees.)"
She went on to add, "My parents bought their house 8 years ago for £90 thousand. A massive 2 reception with 4 bed and 2 huge gardens with a drive. Bad condition. Last year the neighbours sold for £230k. This year the other neighbours has been valued at £280k. My parents are thinking of selling for approx £290k.
So in 8 years their house has increased by £200k.
"£90k now would get you nothing at all. Also you need a 10% deposit. So how can we do it? How? Please tell me!"
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The satirical website Newsthump also offered some number-crunching.
"The average first-time buyer's property in England is £224k. You'll need a 10% deposit as a first-time buyer (you CAN get a 95% mortgage if you shop around, but you'll get screwed on the rates, which will cost you even more over time).
"So realistically, that's £22k you need to save for the average first-time house. It's at least double that for London.
"Now, as Kirstie Allsopp generously explained, there ARE steps you can take to save the money you need, so:
Drop your daily coffee = £3 a day, 20 days a month = £720 a year
Cancel Netflix = £6 a month = £72 a year
Cancel your Gym membership = £50 a month = £600 a year
Don't take that Easyjet holiday with your mates in Spain = £700
That's a total saving of almost £2,100. That's pretty good. That's quite a lot of extra cash to have saved over a single year. Some sacrifice, yes, but a nice extra sum.
However, here's the rub. House prices last year went up by 10% so your deposit requirement went up to £24,200 - a rise of £2,200.
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"So, now you're sat there, after a year of giving up many things you like, after a year of belt-tightening and less enjoyment in your social life, and you've done ALL of that to find yourself £100 FURTHER AWAY from your deposit requirement than you were a year ago.
"Unless, of course, your Dad is a multi-millionaire Baron."
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The average property price in the London region is now £661k - an increase of £4.7k (1%) over the last year, while the cheapest place to is the North East with an average price of £138, 151.
Mortgage lenders usually ask for three years' accounts or proof of full time employment, and at least a ten percent deposit, plus stamp duty, legal fees and moving costs. Perhaps that's why the average age we buy our first homes in Britain is 33 - and in London, it's now 35.
In the 1990s the cost of a deposit was just over a quarter of the average household income of £20,591 - and only 26% of buyers had financial help from their parents.
