Home is the heart, but a mortgage is the misery

In response to the UK government’s decisions on housing in the Autumn Budget, Dr James Gregory said:

"Today’s Budget marked a welcome shift in the tone of Britain’s housing debate.

“Healey’s central message – that ‘home is the heart of all our lives’ – signals a departure from the obsessive belief that it is only homeownership that really provides that heart.

"But easier access to first-time homeownership is still a core objective. The Budget contains a new First Time Buyer ISA, targeted at those 'who don't have the bank of Mum and Dad behind them'.

“The ISA will help individuals save for a deposit and retains some of the features of the Lifetime ISA it replaced, including a top-up contribution from the Treasury. This is one prong of a two-prong strategy. The second is a New Homes Scheme, which will allow eligible applicants to borrow 20 per cent of the value of a newbuild home, with zero interest for five years.

"Taken together, these schemes will help a significant number of households to achieve their ownership aspirations. But will this really help aspiring owners to find the heart of their ideal home?

“If the ‘heart’ of the home suggests happiness and a sense that all is well with life, joint research from the University of Birmingham and the Austrian Institute for Economic Research sounds a note of caution.

"Using national data from across Europe, with robust controls for the relative affordability of homeownership, we discover an alarming British exceptionalism. Compared to all other countries in our sample, and compared to the alternatives of social or private renting, we find that mortgaged owners in the United Kingdom have one standout characteristic – they are more likely to be depressed and less likely to be satisfied with life."