Strutt, Parker and the Smashed Avocado Doctrine
A quick quiz: Why can’t people aged under 40 afford a house in London?
A) Houses in London are ludicrously expensive
B) They waste all their money on expensive coffee, booze, drugs and holidays
If you answered B to that question, first well done for reading Medium because demographically that’s unlikely. And second have a look at yourself because, well, you’re an idiot.
In what can be termed the Smashed Avocado Doctrine of the housing crisis, angry non-millennials are increasingly attempting some revisionism to the widely accepted consensus that the market is broken: placing the blame instead at the door of the mythical ‘frivolous young person’. The most illiterate example of this so far was published today, with estate agent and property consultancy Strutt and Parker inexplicably agreeing to attach its brand to some self-styled ‘research’ claiming young people could save a £93,400 deposit in five years simply by making their own packed lunches.
Let’s get it clear at the outset that S&P’s numbers are stark-raving bonkers. It’s a genuine surprise they were cleared for release on the basis of the maths, let alone the looming PR disaster that the research always was. S&P say a typical young person could save:
£6,000 a year by giving up one night out a week: Which comes to £115 each. This is not the average. It’s not even close. I’m not sure I’ve ever spent more than £100 on a single night out and most weeks they progress about as far as my local Wetherspoons where they do a beer and burger deal for £5.50.
£2,640 a year on takeaway: That’s £50 a week. Based on the menu in my favourite tandoori, that’s five chicken jalfrezis, five portions of onion bhajis, plus five garlic naans. If we ate like that we’d die of a heart attack well before buying a house.
£2,576 a year on sandwiches: With 260 working days in 2017, that’s £9.90 a day. Tesco Meal Deals cost £3 each. And a snap survey of the four millennials who share a bank with me in the office shows the general average is one cuppa soup, one home made sandwich, one tuppaware of last night’s dinner and one portion of whatever-has-a-yellow-reduced-sticker-on-it.
£700 a year on a single city break: If you’ve ever spent £700 on a budget airline and an AirBnB you’re not a true millennial.
£832 on lottery tickets: That’s £16 a week on lottery tickets. I can only assume this was accidentally included because it’s not even a proper stereotype of my generation.
And with all those assumptions, S&P still need to assume a £29,400 free gift from mum and dad to get close to the average deposit to buy outright in London. And ignore the fact that a bank won’t lend more than 4.5 times your income.
So far so stupid. But there is more wrong with this argument than poor maths.
Leaving Strutt and Parker’s silly numbers to one side, I can see why a knee jerk reaction from those listening to millennials whine about their finances may be to point out that we do spend quite a lot of money on things we don’t necessarily need. A big chunk of the typical income of a young, middle class graduate goes on leisure and tech. We go on holiday more than previous generations, and kicking a daily Pret coffee wouldn’t hurt anyone’s pocket.
But this has nothing to do with not being able to buy a house, and ironically enough, the above numbers prove that. They show that even if you were spending those loony sums of money on lifestyle, you’d still come in thirty grand short of buying a house by cutting them out. So you might as well take your chance with the lottery tickets.
This talk about avocado toast and wild nights out is also a problem in that it trivialises the housing crisis into being an annoyance for over-privileged graduates. Those who are really suffering the effects of the broken market in the capital are the London families who have less than what Strutt and Parker assume the average cost of a night out to feed their children for a month.
In short, the real reason why the market is broken is that house prices are set according to what investors can pay not humans.
And the real reason millennials can’t save is that most of our income goes on rent — not nights out, lottery tickets and £9.90 lunches.
So don’t blame the sandwiches. Blame letting agents, estate agents and companies who profit from helping developers reduce their affordable housing commitments. Ironically enough, Strutt and Parker is all three.