What Would Happen If All Young People Gave Up 'Luxuries' to Buy a House?

We asked financial analysts and economists what would happen if an entire generation cuts down on Netflix, Easyjet holidays and lattes.
A pedestrian passes the Battersea Power development in the Nine Elms district in London, UK
A pedestrian passes the Battersea Power development in the Nine Elms district in London, UK. Photo: Hollie Adams/Bloomberg via Getty Images

Newsflash: You, too, can outmanoeuvre low wages and astronomical house prices to get on the property ladder. According to Kirstie Allsop, who is more famous for her craft projects than her financial planning services, you just need to cancel Netflix and gym memberships, forgo budget holidays and not drink coffee.


The idea that young people could own a home, if only they stopped spending their minuscule disposable income on the few remaining slivers of pleasure for a generation battered by worsening social mobility and the pandemic, isn’t an original idea. It’s just a cheap shot from a privileged, middle-aged few at a section of society that feels locked out of any sense of security. 

Today, savings for a deposit would have to amount to, at the very minimum, £25,000, 10 percent of the cost of an average priced home in England, although the average UK first-time buyer needed to put down a £54,000 deposit on a property costing around £264,000 in 2021. To save £25,000, you would have to go a mere 148 years without a premium Netflix subscription.

But what exactly would happen if young people did start scrimping, as Allsopp suggests, to raise a deposit? Nothing good, as it turns out.

There have been suggestions that extreme cutting back could damage the UK economy. Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, says any significant reduction in spending on services, such as retail or leisure, would take a toll on the country, not least because service industries make up 80 percent of total UK economic output and 82 percent of employment.


“If any segment of society stopped spending entirely on non-essentials and saved every penny instead, it would have an impact on the economy,” she tells VICE. “Those sections of the economy dominated by young people could face survival issues, but every business would take a hit.” 

“You only have to look at how keen the government was to get us back into the office, so we could start spending money on coffees and lunches again, to see how much businesses rely on these habits. The Office for National Statistics even started measuring transactions in Pret as a proxy for office workers returning.”

Young people would also have to save for almost double the time today as they would have done 20 years ago, and that’s if they put away a hefty 15 percent of their take-home pay. “If you’re looking at a 20 percent deposit and how that’s changed through time, that would take a typical first-time buyer buying a typical property about nine and a half years to save,” says Robert Gardner, the chief economist at Nationwide. “Whereas if you look back to say 2001, it was five years.”

In reality, though, young people tightening their belts are unlikely to ever cause economic collapse, because they already spend the smallest proportion of their income on non-essential items compared with any other age group. Instead, most of their money is being gobbled up by housing costs and other essentials.


“On average, younger people tend to be on lower incomes than their older counterparts, with those under the age of 29 earning less than anyone else, and average earnings peaking at age 40-49,” Coles says. “It means they fundamentally have less to spend on everything. They are also more likely to rent, which absorbs an average of around a third of their income – whereas mortgages only absorb around a fifth of the income of those paying mortgages – so they spend a larger proportion of their income on essentials and a smaller proportion on non-essentials.”

Saving for a deposit by doing as Allsopp suggests is simply impossible. Moving in with parents for a while or to a different area could help, but it would be marginal, says Christine Whitehead, emeritus professor of housing economics at the London School of Economics. 

“It’s very, very difficult to put together the sorts of deposits needed [to buy a home],” she says. “The deposits in London now are such that most young people aren’t going to earn that sort of money in years, in their lifetime, unhappily.”

Gardner adds that the time taken to save for a deposit varies vastly by region. “In London, for example, saving a 20 percent deposit would take 16 years if you saved 15 percent of your income… If we looked at somewhere like the north of England or Scotland, it’s nearer six years.”


Instead, many young people have to rely on help from family or inheritance. “In 2018-19, a third of first-time buyers had a gift or a loan from family or friends,” Gardner says. “That speaks [volumes] about inequality and means you’re reliant on your wider circumstances, not just how much you earn yourself. It’s whether or not you’ve got people who can help you out as well.”

Recent research from the Resolution Foundation found that this reliance on family help means that people with parental property wealth are almost three times more likely to own their home at 30 than those without. 

There’s more bad news. If all young people were able to buy homes, it would only push prices up further because of basic supply and demand. “Boosting demand dramatically at the bottom end of the market without any measures to increase supply would ramp up the prices of homes for first-time buyers,” Coles says. “Already the market is massively imbalanced, with far too many buyers per seller, so there’s a real risk of exacerbating this trend.”

Felicia Odamtten, an economist at the Resolution Foundation, agrees. “We’ve seen in the past that measures to boost or increase homeownership has led to more inflation in house prices – not catastrophic, but it has had some kind of inflationary impact... If there were a real radical scheme to boost homeownership among young people, there would have to be a counter scheme to repress demand from other groups, such as second buyers, to manage the house price inflation.”


Gardner cautions against predicting dramatic changes in any section of the economy because nothing happens in a vacuum, and the Bank of England can react and adjust interest rates. “It’s all part of a wider system that’s very hard to disentangle,” he says. 

But for as long as renting is precarious and bad landlord practices go unchecked, there has to be a solution that would let young people buy a home for the security everyone deserves. 

Whitehead points to changing underlying income distribution, which is set heavily against young people, as the answer. “The most obvious thing would be to introduce some form of property taxation on existing owner-occupiers, which helps to enable prices to fall and get people into the market.”

Such a move would appall some – most likely homeowners looking to buy a second property – but it would be a lifeline for an entire generation disproportionally shafted by the yawning gulf between wages and house prices. Anyway, it’s a small price to way if you wanted to stop the intergenerational warfare over housing.