Home ownership: Did earlier generations have it easier?

Queue for houses in 1964

In April 1964, 300 people queued up for four days and nights in a muddy field not far from Heathrow airport.

They camped in anything they could find: canvas tents, Ford Anglias and even deckchairs.

They kept their spirits up by playing cards, or cooking bacon and eggs on portable stoves.

Eventually the first 187 in the queue were rewarded.

In return for a £50 deposit, they secured the promise of a new house on the site, in Sunbury-on-Thames.

It was an era when the country as a whole made a psychological down-payment on the idea of home ownership, an aspiration that has inspired and troubled us ever since.

But did previous generations have it any easier?

Did they have to struggle to afford a home in the way that so many do now?

How prices have risen over the decades on one housing estate

Brick by brick

Around a dozen of those who queued up in 1964 are still living in the houses they bought that day.

Among them are John and Margaret Webb, who took it in turns to queue on that muddy field.

They agreed to pay £4,600 for their new home, and moved in as soon as it was finished.

"We loved it," says Margaret. "I remember coming in. I sat down here. I couldn't believe it. It was ours!"

Bernard and Maureen Clayton were also enthused by their house, which cost them £4,300, and has now been their home for nearly 50 years.

"We saw it being built, brick by brick," says Bernard.

But affording the repayments was not easy, even then.

Rising house prices in Sunbury

house in Seymour Way
  • 1964: £4,300
  • 1991: £88,000
  • 2013: £335,000

"It was difficult," says Bernard, who worked as a photocopier service engineer. His wife worked as a PA.

"If I had 10 bob left over at the end of the week, I thought we'd done well," he says.

But careful budgeting made it perfectly manageable. "We could afford it. We didn't starve, or anything silly like that."

At the time John Webb was earning £20 a week in the army.

"When getting the deposit, we had to twist the bank manager's arm," he says. "He was a benevolent chap, who wore a wing collar. Eventually he agreed to put it down as 'furniture and fittings'."

Second generation

Neil Butson, whose parents queued up in 1964 for a house, was born and brought up here.

He loved the place so much that he decided to move back as an adult.

But by the time he made a purchase, in 1991, the price of houses had soared to £88,000.

houses Houses on the estate in Sunbury have been loved by three generations of homeowners

At the time mortgage rates were as high as 15%, making his monthly repayments £1,300 a month.

"It was a struggle," admits Mr Butson. "I allowed myself to go out once a week. I didn't have a holiday for two years. But I think in the long run it's paid off."

However, at the time, homeowners could claim tax relief on mortgage payments, which made ownership slightly more affordable.

Mortgage Interest Relief At Source (MIRAS) was finally abolished in 2000 by Labour, who argued that it was a perk for the middle classes.

New arrivals

So how much have the latest arrivals on the estate had to pay for their houses?

How have house prices outstripped inflation?

Road sign
  • RPI since 1964: +1,600%
  • House prices in Sunbury: +7,000%

Jo Foy and her husband Tim, a police officer, arrived in February 2013.

They paid £325,000 for the house, and their mortgage is £1,500 a month.

That price represents a rise since 1964 of roughly 7,000%.

By contrast, inflation as measured by the Retail Prices Index (RPI) has risen by 1,617% over the same period.

Or put another way, if house prices had only risen by general inflation, Jo and Tim would have been able to buy a house here for just over £73,000.

As it is, they struggle to afford the repayments, which amount to more than 40% of their joint income.

"Half of what comes in goes out in mortgage payments. It's a massive chunk," says Jo.

"We are taking a couple of hundred pounds a month out of savings," she says.

Jo and Eleanor Foy New arrivals like Jo Foy are finding mortgage payments difficult

Anne Hicks, a health visitor, is one of the latest arrivals, having moved in in September. She paid £335,000.

The only way she can afford to live here is on an interest-only mortgage, so may never own the house outright.

"To support three children, that's the only way," she says. "A repayment mortgage would be too much."

On the other hand recent buyers have had the benefit of much cheaper loans.

As this estate approaches its 50th birthday, one thing is clear: nothing seems to dull the dream of homeownership, however tough the struggle.

More on This Story

More Business stories

RSS

BBC Business Live

  1.  
    HOUSE SALES 10:21:
    A general view of residential housing on a street in south London

    UK property sales in June hit their joint highest monthly total since the financial crisis began, figures released by HM Revenue and Customs (HMRC) show. But sales among young adults are low. There were 109,580 sales in June, the same as in November last year, and the highest since the end of 2007, HMRC says.

     
  2.  
    MARKET UPDATE 10:20:

    Tokyo stocks rose 0.84% by the end of Tuesday, boosted by a weaker yen as traders returned from a three-day holiday weekend. The benchmark Nikkei 225 index climbed 127.57 points to finish at 15,343.28, while the Topix index was up 0.79%, or 9.98 points, at 1,273.27. The gains were in line with a pick-up across Asia after pro-Russian rebels handed over the black boxes of the crashed Malaysia Airlines jet.

     
  3.  
    PUBLIC BORROWING 10:03:

    More on the Bank of England interest payments. Essentially, the £3.9bn in interest payments transferred to the government by the BOE are a bit of an accounting wheeze. Whether the money really exists is debateable. It might be better explained as money the government hasn't had to pay out in interest payments to bond holders because quantitative easing means the BOE is the bondholder in question.

     
  4.  
     
  5.  
    PUBLIC BORROWING 09:49:

    The first three months of 2013 saw higher than usual income tax payments as higher earners delayed bonus payments until after the top rate of incomes tax fell to 45% from 50%. That's why income tax in the first three months of this tax year was 3.5% lower than in the first three months of last year. Even so, public borrowing isn't falling as predicted and missed analysts expectations for June by nearly £1bn. There were also receipts from a Swiss tax avoidance deal.

     
  6.  
    PUBLIC BORROWING 09:42:
    The Bank of England,

    The Treasury has pointed out that the public sector net debt (PSND) figures were affected by unusual tax receipts last year while the Bank of England transferred £3.9bn of interest payments due on government bonds. When the effect of those tax receipts is stripped out the PSND in June is £0.1bn lower than the same month last year.

     
  7.  
    PUBLIC BORROWING 09:33: Breaking News

    Public borrowing was £11.4bn in June, official figures released this morning have shown. The figure is £3.8bn higher than the same month last year.

     
  8.  
    EUROTUNNEL PROFITS 09:17:
    A train leaving the Eurotunnel

    Eurotunnel has released half year results: It says core profit is up 6% to 216m euros (£170m) thanks in no small part to the recovery in the UK economy, leading to more of us taking trips over to the continent plus stronger freight traffic. Revenues are up 8% as well. Eurotunnel has kept its full year guidance the same saying it expects profits to hit 460m euros.

     
  9.  
    CHINA FOOD SCARE 09:06:
    Workers producing food at the Shanghai Husi Food Co., a factory of US food provider OSI Group, in Shanghai

    Chinese police are questioning staff of US food supplier OSI Group for selling expired meat, according to state media. Shanghai authorities on Sunday shut an OSI plant - a supplier to McDonald's and KFC in China - for mixing out-of-date meat with fresh product, re-labelling expired goods and other quality problems following an investigative report by a local television station.

     
  10.  
    TIME WARNER TAKEOVER 08:52:
    Rupert Murdoch, executive chairman of News Corporation,

    Time Warner has tightened up its bylaws just in case its shareholders get twitchy and try to call a special board meeting to discuss a second attempted takeover bid from Rupert Murdoch's 21st Century Fox, according to a report in the Daily Telegraph. It follows the news that Time Warner rejected an $80bn (£46bn) approach from Fox last month. The amendment blocks a standard rule that 15% of a company's investors can vote to call a special meeting.

     
  11.  
    MARKETS UPDATE 08:37:

    European markets have opened higher this morning, despite fears over further European economic sanctions against Russia. Royal Mail is the biggest faller on the FTSE 100 down 3.5% to 450.4p after is said its parcels revenues fell 1% in the three months to 29 June:

    • The FTSE is 0.42%, or 28.57 points, higher at 6,757.01
    • Germany's Dax is 0.67%, or 64.08 points higher at 9,676.13
    • France's Cac-40 is up 0.56%, or 24.07 points, to 4,328.61
     
  12.  
    RUSSIAN SANCTIONS 08:23: BBC Radio 4

    Prof Marie Mendras, a former French government adviser, is speaking on the Today Programme about sanctions on Russia after last week's plane crash. She's particularly talking about Russia's order of warships from France. French President Francois Hollande is "stuck" she says. He may reconsider the sale of the second warship. "Each country is trying to defend its economic interests," she says.

     
  13.  
    RUSSIAN SANCTIONS 08:13: BBC Radio 4

    The European Union's (EU) economic sanctions against Russia are likely to be tightened today, when European foreign ministers meet in Brussels following the downing of Malaysia Airlines flight MH17, the BBC's Europe Editor Gavin Hewitt tells the Today programme. It is most likely those sanctions may see more people added to the list of proscribed persons in an effort to bring EU sanctions in line with those in the US. But Germany and the UK are at odds over how tough sanctions should be, he adds.

     
  14.  
    ROYAL MAIL Via Twitter Kamal Ahmed BBC Business editor

    tweets: Royal Mail: despite parcels performing less well, letters decline is not as rapid as expected. Performance in line with guidance

     
  15.  
    LIDL TAX 07:48: BBC Radio 4

    BBC business reporter Joe Lynam points out that as a German company that operates in the UK, Lidl doesn't have to disclose the amount of corporation tax it pays in Britain, but adds it is likely the supermarket does not want to be seen in the same light as Starbucks, Google and Amazon, who were widely criticised last year over the amount of corporation tax they did or did not pay here.

     
  16.  
    ARM RESULTS 07:35:
    Arm

    Chipmaker Arm posted a 9% rise in second-quarter profit, helped by strong demand to license its technology. The Cambridge-based company, which had previously made microchips for Apple's iphone and receives revenue for selling its blueprints and royalties, reported pre-tax profit of £94.2m.

     
  17.  
    LIDL TAX 07:29: BBC Radio 4

    German discount retailer Lidl has disclosed it paid £25m in tax in 2013 following a campaign to get it to publish its full financial accounts in the UK. Bryan Roberts from retail analysts Kantar Retail suggests that means Lidl is paying around 20% in corporation tax on a 3% margin. Julian Bailey, a spokesman for Morrison's supermarket tells the Today Programme it is "a pity it took Lidl so much time" to disclose how much tax it pays.

     
  18.  
    ROYAL MAIL 07:17:
    Royal Mail letterbox

    Royal Mail says it's had a weaker-than-expected performance in UK parcels, "largely driven by the intensifying competitive environment" in the three months to 29 June. "Given the increasing challenges we are facing in the UK parcels market, our parcels revenue for the year is likely to be lower than we had anticipated," it said.

     
  19.  
    VODAFONE COVERAGE 07:10: Radio 5 live

    Jeroen Hoencamp, the Vodafone UK chief executive has been on 5 live talking about the firm's rollout of 3G to rural areas that previously had poorer mobile internet access. "We need to be very careful there won't be a digital divide between urban and rural areas," he says.

     
  20.  
    CREDIT SUISSE 06:59:
    The logo of Swiss bank Credit Suisse

    It's not a great day to be a Swiss banker, especially one working for Credit Suisse, which has this morning reported its biggest loss in nearly six years. It took a 1.6bn Swiss-franc charge (£1.04bn) as part of its settlement with authorities over tax evasion charges. The bank has also reported a loss of 700m Swiss francs for the second-quarter, compared with a profit of 1.05 billion francs a year earlier.

     
  21.  
    PUBLICIS RESULTS 06:51:

    Communications firm Publicis, which you'll remember tried to merge with rival Omnicom, said it would be "very difficult" to meet its annual target of 4% growth in sales after a second-quarter slowdown. Part of the reason was the end of that merger, it said, as well as the strength of the euro.

     
  22.  
    MARKETS UPDATE 06:44:

    After a rally in Asia in the wake of a softer approach from Russia overnight, following the downing of Malaysia airline's flight MH17, European markets are expected to open a bit higher this morning. The Nikkei rose 1% to 15,368.28, while the Hang Seng rose 1.4% to 23,716.24.

     
  23.  
    RUSSIAN SANCTIONS 06:37: BBC Radio 4

    London houses enough Russian money that the UK could "really hurt" the country through economic sanctions and the freezing of assets - particularly property, but businesses as well - following the downing of Malaysia Airline's flight MH17, should it want to, says money laundering expert Jeffrey Robinson, who has been described by the British Bankers' Association as "the world's leading financial crime author".

     
  24.  
    PENSION PROTECTION FUND 06:25: Radio 5 live

    Lady Barbara Judge is on 5 live. She's the chairperson of the Pension Protection Fund, which pays your pension if your employer goes bust. It's basically a re-insurance system, she says. They manage £16bn of assets. "It's very important people get good guidance on what they're doing" in pensions, she says.

     
  25.  
    TESCO 06:10: Radio 5 live
    Tesco"s chief executive Philip Clarke

    More from Richard Dunbar, investment director at Aberdeen Asset Management, on 5 live, this time talking about the departure of Tesco chief executive Philip Clarke. "He made some good decision tidying up the overseas portfolio," Mr Dunbar says. But, "it was also the UK business that was the problem" which he "didn't get to grips with." He may be asked to work until the start of next year to help the handover to his successor, Dave Lewis, he says.

     
  26.  
    SFO INVESTIGATION 06:02: Radio 5 live

    Richard Dunbar, investment director at Aberdeen Asset Management, is on 5 live talking about the Serious Fraud Office's investigation into the foreign exchange market. "There are 15 agencies now looking into it," he says, and despite being a £15trn market, it is a "surprise such a big market can be manipulated in the way the SFO may feel."

     
  27.  
    06:00: Matthew West Business Reporter

    Morning everyone. The big news from overnight is that Yahoo has acquired app analytics firm, Flurry, to help boost its advertising revenue from smartphones. As always you can get in touch with us at bizlievepage@bbc.co.uk and on twitter @bbcbusiness.

     
  28.  
    06:00: Howard Mustoe Business reporter

    Good morning everyone. There's a number of financial results and some economic data slated for today, so we'll be bringing you the best of that, and much, much more. Stay tuned.

     

Features

  • ScissorsWithout Scotland?

    How might things change for the rest of the UK


  • VigoroAnyone for Vigoro?

    The bizarre Edwardian attempt to merge tennis and cricket


  • Payton McKinnonLeft behind

    Why do so many children die in hot cars?


  • Dr Mahinder Watsa Dr Sex

    The wisecracking 90-year-old whose agony column is a cult hit


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.