The housing supply problem: Part Two

This is an audio transcript of the FT News Briefing podcast episode: ‘The housing supply problem: Part Two’

Marc Filippino
Good morning from the Financial Times. Today is Thursday, June 1st, and this is your FT News Briefing. 

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US lawmakers cleared a major hurdle last night to raise the debt ceiling. And as part of our ongoing reporting on the rising cost of housing, we’ll meet a homesharer. She’s part of an unusual solution to skyrocketing rents. 

Barbara
I mean, a lot of my friends said, oh, what? I would never do that. (Laughter)

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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The US House of Representatives last night approved a bill to raise the debt ceiling. It’s a key step needed to avoid a catastrophic US default. Treasury secretary Janet Yellen has warned that the government will run out of money if the debt ceiling isn’t raised by Monday. Getting the deal through the House proved to be a tough test for Republican House leader Kevin McCarthy. He had to rein in far-right party members in order to secure enough votes for a deal. The bill caps federal spending for the next two years until after the next US presidential election. It still needs to be approved by the US Senate before heading to President Joe Biden’s desk. 

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Today, we’re bringing you part two of our special series on housing shortages. Last week, we looked at rising costs in the US and today we’re going across the Atlantic. By one estimate, UK rents are 25 per cent higher than they were before the pandemic, and house prices have shot up more than 20 per cent. Homes have become so unaffordable, people are looking for workarounds. One solution is called homesharing. FT audio producer Persis Love met two homesharers and she joins me now to talk more about it. Hi, Persis. 

Persis Love
Hey. 

Marc Filippino
OK, so homesharing is actually kind of a new phrase for me. I’m just hearing about it recently. What exactly is it? 

Persis Love
So homesharing is basically just, two people are living together, but one of them tends to be a homeowner and they open up a spare room they have to somebody who’s looking for a place to stay. And in exchange, that person does about 10 to 15 hours a week of household chores. So it’s something that’s been around for a while. But because housing costs and particularly rental costs have been increasing so much in recent months, homesharing organisations have said they’ve seen a massive uptick in interest. 

Marc Filippino
That makes sense. I could see the appeal of that. What’s the difference between homesharing and just roommates? You know, two people sharing an apartment or someone living alone? 

Persis Love
I mean, one of the key differences is the price of it and the way that that cost structure is set up. The other difference is the household chores and also the relationships that will exist between the two. So a few weeks ago, I went to visit a homesharing pair, a woman named Barbara, who has been living in her home in North London since 2006. And then for the past year, she’s been sharing her house with Isaac who is 25. So there’s this intergenerational pair, they’re living together. And I produced this piece, which hopefully will give you a sense of what their homesharing set-up is like. 

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The day I visited, Isaac was showing Barbara some music that he was working on on the piano. Barbara was sat on the sofa. She had her hands in her lap and she was enraptured listening to him play. Barbara actually used to be a piano teacher. And Isaac had just graduated from a music degree when he moved in, which was about a year ago. 

Isaac
And I was not earning a whole lot at the time. And I was looking to change career path and actually go into something that would require me to have my degree. 

Persis Love
So renting a room in London can easily cost £1,000 a month, and Isaac didn’t want to spend that much. He made some calls to a Citizens Advice service and they told him about homesharing. 

Isaac
I needed something that was gonna take the financial pressure off, at least for the short term. 

Barbara
And I mean, a lot of my friends said, oh, what? I would never do that. (Laughter)

Persis Love
But Barbara didn’t want to live alone anymore. Her husband had moved into a care home for people with dementia, and she was at a support group for people affected by dementia, which is where she found out about homesharing. 

Barbara
One day I thought, I’ve got room, so why not give it a go? 

Persis Love
So Barbara actually doesn’t make any money out of this. She pays £99 a month to the homesharing organisation that helped match her with Isaac, and in return he does 10 hours a week of household chores. 

Isaac
Empty dishwasher, refill, sweep and clean patio. 

Persis Love
And Isaac, he pays the home sharing organisation £170 a month, which is a lot less than he would pay to rent a room in London. And what he saves on rent, he’s putting away every month to try and buy a house one day. 

Isaac
The time it would take for me to get a deposit together, it would take three times as long. 

Barbara
I find the fact that Isaac is in the house at night very reassuring because anything can happen. 

Persis Love
Actually, most of the homeowners who do homeshare are elderly people like Barbara, and it’s not always smooth sailing. 

Barbara
You have to be a bit . . . What would you say? 

Isaac
Open? 

Barbara
Open. And open also that there could be difficulties. Isaac is very good at not getting offended.

Isaac
Mmm.

Barbara
And that’s very good. That’s why he really scores. (Laughter) And I don’t feel with him I have to be particularly diplomatic. You know, I’m German, so we don’t like beating around the bush. (Laughter) But it’s also, I mean, for you, it’s not 100 per cent secure because you never know what will happen to me. I mean, I’m . . . 

Isaac
No, no. That’s right.

Barbara
I’m 78 and got health issues so . . . 

Isaac
No, that’s right. But I think having the experience of doing homeshare in the first place kind of makes it . . . 

Barbara
You could do it again. 

Isaac
That’s right. Yeah. 

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Marc Filippino
Persis, that was lovely. And it seems like they really get along. But I wonder, does homesharing work for everyone? And what happens if people don’t get along? 

Persis Love
So I think people not getting along is actually quite common. And I know that homesharing has quite a high turnover. I think that’s partly to do with the householder often being someone who is elderly and often their care needs reach a point that they need more kind of constant live-in care. But that has to do as well with the dynamic between the two people. And actually, interestingly, lots of the homesharers that I spoke to, part of the appeal for them was the dynamic or was kind of wanting to find an inroad to a living situation that wasn’t just like anonymous people paying for rooms and kind of not sharing any quality of life, but for people who were looking for a real route into a community and living with someone who maybe has been embedded in that community for much longer, was their way of doing that. 

Marc Filippino
And what also struck me about your piece, Persis, is that the only one who’s making any money out of this is the homesharing organisation. Barbara pays a monthly fee. Isaac pays his rent to the organisation. Why is it structured this way? 

Persis Love
The homesharing organisations that I spoke to say that the fees that they get from the householder and from the homesharer is what enables them to run, to cover their costs essentially. Another argument they put forward for it is the, you know, if you have an elderly homeowner actually paying a fee like £100 a month to have someone who’s in your house all the time or who’s carrying out these household tasks is quite a small cost compared to what you would pay for a more privatised, low-level social care. 

Marc Filippino
Persis, thanks so much for this piece. I really enjoyed it. 

Persis Love
Thanks for having me on, Marc. 

Marc Filippino
That’s FT audio producer Persis Love. 

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Next week, we’ll go back to the US to look at a potential solution: abandoned office buildings. Can turning them into apartments help solve the housing crisis? 

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You can read more on all of these stories at FT.com This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news. 

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