This paper focuses on the actual experience of housing affordability, revealing how deeply the problem cuts into the financial and general wellbeing of renters. Not only does it create intense hardship for many, but there is no escape from the relentless squeeze between income and rents. The findings also indicate that, for many renters, it is not that rents have increased to excessive levels (they have been relatively constant) that has created the affordability problem, but that incomes are too low and too uncertain. In a deregulated labour market environment, this is only likely to worsen. Recognition that there is a deep and permanent affordability issue for many renters suggests that all the focus on home ownership programs has got more to do with political point scoring and policy capture than anything to do with the real affordability problem.
This is not to say that we do not have a purchasing problem. We do, but it is now of a form that the current policy interventions are as much part of the problem as the solution. We have to recognise, as the respondents in these two surveys do, that labour markets and housing markets are interlinked. As previously indicated, the high rates of ownership achieved in the first three decades of the postwar years were enabled by a very different labour market to that of today, one that was inclusive of all (except married women), full-time and permanent. Today’s labour market is polarised. For many, it is increasingly casualised, part-time, low paid and exclusive (particularly of the old and those without skills). For others in the professions and skilled trades, it provides opportunities for real income increments unparalleled in earlier years. This flows into the housing market and will continue to do so. Appeals to raise home purchasing rates back to those of the past are increasingly futile. New times create new market patterns and therefore the need for new policy interventions. Rental is the tenure of the future, and more policy attention should be given to providing this sector with more of the elements of ownership (security, ability to adapt to tenants’ needs, long-term affordability), but without undermining continued investment in new stock that is appropriate and sustainable.