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Pay gap, caring and confidence: why is it still so much harder for women to buy in London than men?

 (Illustration by Barbara Gibson)
(Illustration by Barbara Gibson)

According to new research by property technology company iPlace Global, it takes a London woman 5.3 years longer than her male counterparts to buy a property in the capital.

This is at least in part because, in the UK, even before they’ve had children, the average woman’s income is 16 per cent less than that of a man and she saves 35 per cent less on average.

“For the average UK property worth £362,452, women would need 12.2 times their annual salary to buy a home whilst men need just over 10 times,” says Simon Bath, of iPlace Global.

No wonder 45 per cent of women who have not bought a property feel more stressed that they’ll be renting for the rest of their lives, compared to 39 per cent of men.

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“Our research highlights that women have a strong appetite to achieve home ownership – but it is the disadvantages of traditional societal underpinnings holding them back,” says Bath.

'I can’t keep up with the price of houses'

Yoga teacher and single parent Kiranjot Kaur plans to set up a second business then buy a home outside of London or abroad (Daniel Hambury/Stella Pictures Ltd)
Yoga teacher and single parent Kiranjot Kaur plans to set up a second business then buy a home outside of London or abroad (Daniel Hambury/Stella Pictures Ltd)

“The shame I feel over not having a house is immense,” says Kiranjot Kaur. The 48-year-old Kundalini yoga teacher currently rents a house in Peckham from her 16-year-old son’s father. But her future in that home hangs in the balance.

“It is unwritten between us that when my son turns 18 I will move out.”

Kaur, a born-and-bred Londoner, tried to buy a house when her parents downsized and gave her some money. “I had £15,000 but I went to the bank and they laughed at me and said I didn’t earn enough to get a mortgage.” This is despite her always earning the average London salary.

“My business is doing OK, but I can’t keep up with the price of houses. My sister made a £120,000 profit on a house she bought and sold after three years, that’s £40,000 a year, which is more than I earn annually.”

Julia Herman, 34, is a journalist who was on the cusp of buying an ex-local-authority, two-bedroom flat in Oval in the summer of 2021.

“At that time, I could just about afford it. I had a good job and savings, but it fell through because it was leasehold and there was a big repair bill. It was cheap for a reason. I’d spent six months going back and forth with solicitors and I couldn’t face another six months of that, so I took a pause.”

During this time, she met and moved in with her boyfriend, who owns a house in Hackney. “He’s said I’m welcome to go on his mortgage and the house is as much mine as it is his but it’s not. I want my own space and I want to be able to say it’s mine. It’s a level of independence and self-sufficiency that feels quite important to me.”

Unfortunately, despite swapping being freelance for being employed, Herman has found getting her own place now is much harder. “The market has moved and I’ve been priced out. I have a good deposit that I’ve spent 15 years saving for, but you need a minimum of £300,000 — even my deposit and five times my salary wouldn’t add up to this.”

Herman feels the gender pay gap is to blame: “Women make up the vast majority of caring and teaching roles, which are low-paid sectors. They also pay penalties because they take time out to have children and it’s often women who care for elderly parents. At all levels they are not encouraged to earn as much as men.”

Extra cost-of-living squeeze

The gender pay gap is nothing new but the cost-of-living crisis has exacerbated the gender imbalance, with women spending an even higher proportion of their income on household expenses.

A recent report by the London Assembly housing committee even suggested that some London homes should be made available to women at lower rents to reflect the gender pay gap.

While Kaur admits she’s lucky to have a subsidised rent in Peckham, she says most of what she earns goes on bills and looking after her son.

“I spend all the money I earn on living, and feeding a teenage boy is expensive! Being a single parent isn’t just about the money or lack of it that we earn. Time is money. The time I take parenting and running a house solo isn’t accounted for.”

Kaur is planning to set up a second business and, if that is successful, she’ll buy outside London or abroad. If it’s not, she’ll look into social housing. “That’s my route out unless my business does well. I’m embarrassed that I’ve found myself in this situation.”

Root issues

Amazingly, it’s only since the Seventies that women have been named on a mortgage but, while the mothers and grandmothers of the generation of women buying today might not have been in the driving seat when it came to their finances, this does not seem to be something that has been passed down through the generations.

“There are still gaps in financial confidence between women and men, but we should be careful drawing conclusions from that,” says Dr Sara Reis, director of The Women’s Budget Group.

“The data on who controls finances and budgets within families shows a more complex picture than men always being the person responsible for money. And there are differences along lines of class — women are more likely to manage money and budget in low-income households while men are more likely to do so in richer households.”

Instead, the WBG has found that most of the difficulty women have in buying a property is “largely based on the fact that in general women earn less than men, and are more likely to be in precarious jobs like zero-hours contracts (so it’s harder to secure a mortgage)”.

“Closing the gender pay gap (hourly difference) and the gender earnings gap (weekly or annual earnings difference) would ensure housing is more affordable for women.

“To achieve this we need to go beyond housing into tackling the reasons for these gaps, including fixing our broken and unaffordable childcare and adult social care systems that prevent so many women from reaching their professional potential.”

So women start off earning less than men and are penalised again when they have children and yet again when their parents get older.

Barriers to buying

Emma Morby, founder of The Female Property Expert which helps women invest in property, agrees that lower salaries aren’t the only way that women — particularly those in London — are disadvantaged.

“If they’re separated, women are usually the ones with the dependants. Mortgage lenders take this into account when they calculate how much you can borrow and any childcare costs also need to be declared.”

What’s more, even if a father is regularly paying maintenance, a mortgage lender would consider this for the children, rather than their mother and a mortgage.

“Unless they are on a high hourly rate, a woman has to be in full-time employment or work 30 hours a week to get a mortgage on a residential property. The base for getting a mortgage is usually a salary of £30,000 and that will get you a £295,000 house on average.” The average price of a property in London last year was £523,666.

Is shared ownership a solution?

Unsurprisingly, then, women account for the largest proportion of shared ownership buyers, whereby you buy a percentage of a new-build property and pay rent to a housing association for the remainder, enabling those on smaller salaries the chance to get on the property ladder.

According to the Department for Levelling Up, Housing and Communities, in 2021-22, women were the main purchaser for 56 per cent of shared ownership dwelling initial transactions and, in London, this figure was 52 per cent, with male solo buyers and joint buyers making up the remainder.

Herman says if she wasn’t living with her boyfriend this is something she’d consider. “If I was paying £900 a month in rent, shared ownership would be preferable to renting, even if the prices often seem expensive for what they are. I’ve had friends who’ve bought properties this way and bought extra shares as they could afford it.”

‘If I didn’t have two jobs, I wouldn’t have had a mortgage offer accepted’

Emma Thomson splits her time working for the NHS and on her own jewellery engraving business, GemzbyEmz (Matt Writtle)
Emma Thomson splits her time working for the NHS and on her own jewellery engraving business, GemzbyEmz (Matt Writtle)

Buying a property in London as a single buyer is not easy or affordable for either sex, but the odds are stacked especially hard against women. This means those women who prioritise home ownership, like Emma Thomson, 32, go to extreme lengths to achieve their goal.

Thomson, a self-declared saver, bought a one-bedroom house in Romford in autumn 2022, with a £40,000 deposit.

“I literally just saved as much as I could from when I got out of school until now. I could walk to work, which saved on travel costs, and my business did very well during the pandemic, which helped. I didn’t buy anything like clothes or luxuries or holidays for years, I didn’t eat out either.

“Every month, my bills come out automatically so most of what I have left, I save. This is usually between £500-1000 a month.”

To maximise the amount she could borrow on a mortgage, Thomson juggles a job in an NHS admin department with her jewellery engraving business, GemzbyEmz.

“I work 30 hours in three days for the NHS and then work the rest of my time on my business, so I don’t have any days off. If I didn’t have both jobs, I wouldn’t have had my mortgage offer accepted.”

‘I had a deposit but, even then, it wasn’t plain sailing’

Author Radhika Sanghani used her book advance as a deposit for a flat in West Hampstead (Natasha Pszenicki)
Author Radhika Sanghani used her book advance as a deposit for a flat in West Hampstead (Natasha Pszenicki)

For Radhika Sanghani, 32, owning her own home was always a priority. “I always wanted to buy in my 20s, but I was working as a journalist and not earning very much, so it felt very far off.”

At 22, alongside her day job, she started writing her novel, Virgin, in the evenings and at weekends. “I didn’t have high hopes or any expectations, but I sent it off and got an agent. My book went to auction, and I got a six-figure advance and a contract for two books.”

Sanghani used this advance as a deposit for a one-bedroom flat in West Hampstead but, even then, it wasn’t plain sailing. “It was complicated, as I had a two-year contract, but you can’t prove you will earn that money after that period. Luckily, the broker made it work.

“I call this my ‘Carrie Bradshaw’ flat. It’s in the basement and not huge, but it’s mine and I’ve made it my own.”

Since then, Virgin has been published in 13 countries and Sanghani has left her day job. “I’ve just written a new novel, 30 Things I Love About Myself, and being an author is now my full-time job.

“I feel so grateful and lucky that I bought a flat and have a mortgage that is manageable. It’s harder for women, for most young people, but especially women. It’s a fact.”

Nearly one in five women are looking to purchase a home next year but with men’s salaries far exceeding women’s, even before they have children, it’s not an easy goal to achieve.

The sad truth is that, as long as there is a gender pay gap, there will also be a gender property gap.