Why Kirstie Allsop’s Sunday Times Article is Just Plain Wrong

Kirstie Allsop is enraged at you, would-be first home buyers. She’s super pissed because apparently, young people are too busy watching Netflix and drinking Starbucks to be able to save for their own home. In an article in this week’s Sunday Times, Allsop has made it clear the level of disdain she holds for people who claim not to be able to afford a property.

Apparently, if you want to buy a place it's as simple as living at home with your parents for 3 years and spending no money during some of the best years of your life, before finally moving to Newcastle. Don’t get me wrong, I'm not knocking Newcastle, but is that really a suitable solution to someone from the South East, or even Manchester, looking to buy their first home?

Let’s not forget that Kirstie Allsop, the supposed voice of reason from Location, Location, Location is the daughter of the 6th Baron Hindlip, and holds the hereditary title of The Honourable Kirstie Allsop. I’m not bloody surprised she didn’t find it difficult to get on the housing ladder.

Of course, she does go on to say she was only earning £11,500 a year when she bought her first place “with help” at age 21, and interest rates were 15%. Oh actually hold on, once we tack on inflation, that £11,500 is £25,000 in today's money. Given that the median 18-21 year old is earning £17,284 in 2021, it’s fair to say she started to put her connections to good use from the get go.

Ok so why am I so wound up about this? It’s because I’m so sick of out of touch, privileged people telling the rest of the country that they just need to ‘spend less’ to get ahead financially. It’s complete bullshit. The housing argument is one of the most polarising areas of this issue, so I’m going to break down the main argument that boomers like Kirstie Allsop make, and why they’re wrong.

The Interest Rate Argument

The number one argument that always gets bandied about is the old chestnut about interest rates. “You’re lucky, interest rates were 13% when I bought my first house”. Jesus wept, how many times have you heard that from someone who bought their first house in Richmond for £45,000?

Kirstie pulls that one out in the Sunday Times piece as well, making the comment that interest rates were 15% when she bought her first property. Let’s break this down a little further. Firstly, it is factually correct. Interest rates spiked in the late 80’s and early 90’s into double digits.

But there are a couple of reasons why it is a massive red herring. Firstly, as we all know, house prices were a lot bloody cheaper back then. According to Halifax, the average property in 1988 in the UK cost £50,000. According to the Bank of England, inflation has increased that £50,000 to £142,660 in today’s terms, and yet the average property now has risen to £268,000.

So sure, you were paying a higher interest rate on your loan back then, but your loan was significantly less than what it has to be today.

The second point, and this is the biggest one, is that those interest rates were only that high for a couple of years! Talking to someone who bought their house back then, you’d think they paid double digits rates for their whole working life. Take a look at the graph below. You can see that rates tended to be a lot higher throughout the 70’s and 80’s and that actually, the early 90’s was the beginning of the lowest period of interest rates we’ve ever seen.

So yes, Kirstie Allsop could have been paying paying 15% on her first mortgage in 1992, but by the time she turned 23 that was back down to 5%. It’s a disingenuous argument which is designed to make the young and less financially stable feel like it's their fault that they are finding life so expensive. It’s not.

The Deposit is the Problem 

Really, the interest rate is beside the point. No young person is complaining that their ongoing repayments would be too high if they got a mortgage. Actually, the sentiment I hear the most is that it's ridiculous that rent costs so much, and a lot of people would be spending less each month if they were able to get a mortgage.

The problem is that with the meteoric rise in average house prices, it has never been more difficult to get a deposit together. And it’s not more difficult because people have more shit to waste their money on. Netflix and Starbucks and £50 Ryanair flights to Mallorca are not what’s stopping the average couple from getting together the average first home deposit of £57,300.

The Times article even states this. 

What is the Solution?

I don’t write public policy, so I don’t know (although they don’t seem to either). You could start with a Lifetime ISA, because it really is a good deal and you’re not going to get any better than that if you’re saving for your first house. 

Apart from using accounts like that to your advantage, focus on growing your wealth. Saving every penny and scrimping your way to some shithole studio apartment is not the way people like Kirstie Allsop end up wealthy. They invest. In their careers, their incomes and their assets.

Focus on looking for ways to earn more and grow your wealth. Push for advancement in your career, start a business or at least a side hustle, invest for the long term and don’t feel like there is a clock on buying your first property. It’s not an easy solution, and it won’t necessarily get you a house quicker, but it is more empowering and much better for your long term career prospects, income prospects and even mental health. It puts you in the driver's seat and allows you to take control of your own financial future.

We cover buying your first home in more detail in this article.

With that said, I do know what doesn’t help. Rich, posh boomers telling young people that it’s not hard to get ahead financially. That if they just “pulled up their bootstraps” that they’d be able to afford just as much as they had when they were in their 20’s. It’s wrong, it’s infantilising, it's disingenuous and it does nothing to further proper debate on steps that could be taken to even the economy and give young people a chance at a financially secure future.