All aboard our starter home! Canal boats, campervans and converted sheds… how generation rent has found novel ways to get places of their own
- Tiny-home movement shows how desperate young people are to escape renting
- An overheated property market means first-time buyers have been frozen out
- Many are now turning to cheap and cheerful alternatives to home ownership
- Boat brokers report record sales amid spike in demand from young people
Priced out of the property market, first-time buyers are opting for cheap and cheerful alternatives to home ownership.
Narrowboats, campervans and even self-built cabins are among the wacky vessels that increasing numbers of young people are calling home.
Just one search of #tinyhome on Instagram reveals reams of colourful pictures of boats and vans – fully renovated and decked out with stylish interiors.
Priced out: Data from Savills shows that in 2019 first-time buyers were behind 51 per cent of house purchases. But by December 2020 this figure had fallen to 46 per cent
While it may seem drastic, the tiny-home movement shows how desperate young people are to escape the merciless renting cycle.
‘It may not be a traditional bricks-and-mortar home,’ says Tom Paddock, who is renovating his canal boat in Manchester, ‘but it is something that is mine and I can generate money from it.
‘I hate renting, as you are just giving money away to somebody else that you could be investing in yourself.’
What’s more, vans and boats are much cheaper to run than a house and, when renovated, they can make owners a small profit.
But for Lizzy Brookes, who built her miniature cabin in Cornwall from scratch, tiny homes aren’t just about practicality.
‘There’s a big sense of community among us. I know lots of other tiny-home owners who I have become friends with through social media,’ she says.
But just how did first-time buyers reach this stage, and why is it still so difficult for young people to buy a traditional house?
Boat life is a great adventure
Marina Popova and Myles Jackson were facing huge rent bills as they moved in together in London in September 2018.
A one-bedroom flat was going to cost them between £1,600 and £1,800 a month. One day, when they found themselves walking alongside a canal, Marina says the ‘penny dropped’ as she suggested they invest in a narrowboat instead.
The couple bought their boat, Alba, for £35,000 using savings and a loan.
Marina Popova and Myles Jackson bought their boat, Alba, for £35,000 using savings and a loan.
They now spend around £1,100 a month on the boat and know that in five years’ time they will fully own it.
Marina, 34, has not ruled out home ownership in the future but it is not her priority.
She says: ‘We both always knew we wanted to have some kind of adventure together. I’d been interested in the concept of tiny homes for a long time.’
Myles, 30, who works in marketing, is able to work from the boat while Marina has been concentrating on their Instagram page and YouTube vlog.
She says: ‘It was lovely during lockdown as we were able to move around and out of London for a bit.’
Relentless renting
An overheated property market has priced out first-time buyers. Lawrence Bowles, a researcher for estate agency Savills, says the problem has been exacerbated by the stamp-duty holiday, which has resulted in a buying frenzy among home movers.
He says: ‘First-time buyers always had a competitive advantage as they were usually exempt from stamp duty.
‘But since the Chancellor introduced the stamp-duty holiday during the pandemic, it has taken away their advantage and sparked a storm in home movers.’
Analysis from comparison website Reallymoving shows that in 2019 first-time buyers were behind 56 per cent of house purchases.
We built our dream cottage
Lizzy and Dan Brookes first embraced off-grid living when they invested in a campervan for £3,000 around 18 months ago.
They were tired of spending £650 per month on rent and were determined to escape the ‘endless cycle’.
After renovating the van — which they bought on Facebook Marketplace — they embarked on an even bigger challenge. They built a ‘tiny home’ from timber on the edge of their family-owned land.
Off grid: Lizzy and Dan Brookes built a ‘tiny home’ from timber on the edge of their family-owned land in Cornwall
The couple (above), who own a salon in Truro, Cornwall, carried out the work while on furlough.
The house – 24 ft by 10 ft – cost just £25,000. Lizzy, 28, says: ‘It was Dan’s idea but I was excited to go down this road.’
The home is plugged into the electrics of the main family house on the same land.
Lizzy adds: ‘It’s really nice to be out of the renting cycle. We felt very trapped.
It is impossible to save while you’re renting and it felt like there was no chance we’d ever have enough for a mortgage.
‘We’re very lucky as we could build on family land. I am in love with it now. It’s our dream home.’
But in 2020 this figure dropped to 51 per cent as home movers started to overtake the market.
The Government has attempted to boost prospects for first-time buyers with the launch of its 5 per cent deposit scheme.
But Lawrence thinks this is an overly simple solution to a complex problem.
He says: ‘The 95 per cent mortgage scheme does not help most first-time buyers, as saving up for a deposit is only part of the problem.
‘The Mortgage Market Review, introduced many years ago, means that house buyers can only borrow so much from a lender.
‘Typically, borrowers are restricted to mortgages that are around 4.5 times their income.
‘When house prices are high, it becomes very difficult for young people, who are generally on lower incomes.’
The frenzied market also means that house prices have shot up, freezing out first-time buyers.
According to property website Rightmove, house prices increased by 1.8 per cent between April 11 and May 8. The average house price has now reached £333,564.
Left with no other options, young people are fed up with seeing their cash drained away by exorbitant rents.
Recent research by Halifax shows that homeowners are on average more than £800 a year better off than renters, due to rising rental costs and low mortgage rates.
It means that first-time buyers are trapped in a relentless renting cycle, leaving them unable to save.
Dan Wilson Craw, deputy director of campaigning body Generation Rent, says: ‘Home ownership is now out of reach in vast swathes of the country.
‘Low interest rates have fuelled house prices, and an inadequate supply of new homes means rents are too high, making it impossible for people to save the deposit they now need.’
Living in this van suits me
Freelancer Amy Nicholson, 33, was in a panic when the pandemic struck last year.
She was living in rented accommodation and had been slowly saving up for a mortgage.
Amy Nicholson, 33,bought a Mercedes Sprinter van for £11,000 and spent a further £10,000 fitting it out as a home
But Amy’s work as a marketing consultant dwindled, leaving her unable to afford her rent and bills.
Amy, from Kent, threw caution to the wind and plunged her savings into a Mercedes Sprinter van for £11,000.
Having never dabbled in DIY before, she spent £10,000 fitting the van, building furniture and adding a water system and gas.
Where she was previously spending £1,500 a month on rent and bills, she now only spends £500 per month on outgoings for the van.
Amy (left) is still saving for a house. She says: ‘I had done a few van trips before and had loved the simple life.’
She roams around the UK in her van, switching between family driveways, campsites and wild camping spots.
Tiny-house boom
The crisis among first-time buyers spells good news for Angus Rose, who runs boat broker Boatshed London.
He experienced a bumper year in 2020, with sales beating all his previous records in his business’s six-year history.
He says: ‘Young couples and students in particular have been steadily interested in boats for years.
‘They are an affordable way for people to get on the property ladder in a very alternative and offbeat way.’
Motorhomes have also experienced a spike in demand. Data from the Caravan and Motorhome Club reveals that industry sales have tripled since 2000.
What’s more, lockdown has inspired an appetite for renovation. With more time and savings on their hands, young people have been plunging their efforts into renovating old boats, vans and even sheds and turning them into homes.
Often, these buyers can then sell on their tiny homes for a modest profit and plunge more money into one with greater space.
Many are also exempt from council tax and stamp duty. However, tiny-home owners do still have high running costs, with many relying on solar panels, bags of coal and gas canisters to provide energy.
And houseboat owners also have to pay residential mooring fees – with costs starting at £2,000 per year – or a continuous cruising licence, which can come to around £1,000 per year.
Meanwhile, motorhome owners are subject to insurance and road tax bills – though owners insist these are often smaller than annual household bills.
However, experts warn that this may not be the most sensible option if home ownership is somebody’s ultimate goal.
David Hollingworth, of L&C Mortgages, says: ‘If you are going to live on a boat, for example, you have potentially got a depreciating asset. They require a lot of upkeep and maintenance.
‘The key is still to get on the property ladder because, once you have a house, buying another house is achievable no matter where prices are at.
‘There is obviously less of a guarantee with a boat or a van.
‘But it does show how difficult it has been for first-time buyers — it’s no wonder people are starting to think outside the box.’
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