‘Labour deceived young people like me’
Disappointment, deception and doom and gloom are just some of the words on young people's lips after Labour's first Budget in 14 years.
Soon, first-time buyers will have to cough up thousands more pounds in stamp duty due to government inaction – a blow only worsened by Chancellor Rachel Reeves's decision to borrow more and stall the downward trajectory of interest rates.
Despite vowing to become the "party of homeownership" in opposition, Labour's policy means 84pc of property transactions will pay at least another £2,000 in tax from next April.
Angus Hanton, co-founder of charity Intergenerational Foundation, said of Ms Reeves's Budget: "Her decisions were stark – she chose decisively to crush the young and do anything she could to support older generations. These are desperate times for young people."
Now, in a fresh blow post-Budget, education secretary, Bridget Phillipson, has bowed to pressure from universities. From next year, institutions will be able to raise tuition fees in line with inflation – marking the first increase to the cost of education in eight years.
Before becoming Labour leader, Sir Keir Starmer promised to scrap tuition fees. But after securing the top job, he binned his pledge to prioritise NHS waiting lists instead.
Economic forecasts aren't looking up for young people. The Office for Budget Responsibility is predicting wage growth of no more than 1pc a year until 2029.
The projections add to an already bleak picture. Real hourly pay for 20-somethings sat at £13.46 last year, 12p less than it was in 2021 – when pay peaked for young people, according to the government-sponsored Social Mobility Commission.
Following Ms Reeves's National Insurance hike, businesses now face higher employment costs. The fear is junior jobs and apprenticeships will be the first to feel the axe swing.
Meanwhile, rents have outpaced earnings for the past three years according to property portal Zoopla. The Office for National Statistics reckons 34.2pc of people's earnings disappeared on rent last year.
Alexander Cobb, 28, works for HS2 and lives in Berkshire. He is rushing to buy a two-bed house before the stamp duty thresholds revert back to what they were two years ago.
From April next year, first-time buyers will have to start paying stamp duty on purchases over £300,000, and home movers on purchases over £125,000. As a result, an additional 20pc of first-time buyers will become liable for the tax according to estate agency Hamptons.
Currently, first-time buyers do not have to pay any stamp duty on the first £425,000 of a house's value, and home movers do not have to pay it on the first £250,000.
Mr Cobb said: "In opposition, the Government said it wouldn't raise taxes on working people – but stamp duty is affecting us directly. I will inherit a £4,000 bill from them once the relief disappears.
"This was also an inflationary Budget, because it has stopped interest rates from falling as fast as they otherwise would. Energy prices are up 10pc off the back of it too. It's safe to say my inflation has gone up since this government came into power. They [Labour] don't get it. It's another kick in the teeth for people starting out in life.
"Whether you voted for Labour or not, we were told they wouldn't raise taxes. People have been deceived. There was nothing in the Budget to relieve pressure on young people. It [the Budget] has avoided responsibility for the people that need it."
Currently, Mr Cobb pays around 7pc in interest on his student loan – a rate he fears will go up in light of Ms Reeves' decision to borrow more.
As a student, Mr Cobb said there were no incentives to do an apprenticeship. "It doesn't feel like there are any for this generation either. The personal tax allowance of £12,570 hasn't gone up, so those on some of the lowest pay are still being dragged into taxation."
In Portugal, the government has taken a very different approach. Last month, politicians said they would slash taxes for those aged 35 and under in a bid to stem the flow of young people out of the country.
Under the Portuguese government's plan, those in this age bracket who earn up to €28,000 (£23,400) would pay nothing in tax for the first year. After that, their tax burden would gradually increase over ten years.
'Everyone got so excited – but it's been a real disappointment'
Sophie Shields, 30, lives in Surrey and is employed in pharmaceuticals. She fears that Ms Phillipson's decision to allow universities to charge "extortionate fees" will have a knock-on effect for the young people working in higher education.
Fees are set to rise from £9,250 to £9,535 next April, representing a 3.1 percentage point increase of £285.
Ms Shields said: "I have a friend working in administration at a university where they are already having to make job cuts because they're not getting as many students as they used to. Extortionate fees will only make that worse.
"If I ever had children, I'd tell them to go into skilled labour because you can start earning straight away."
Ms Shields doesn't believe any government, Labour or Conservative, can do much for young people. She says: "Everyone got very excited [about Labour's Budget] but it's been a real disappointment."
She adds that stamp duty should be calculated by area, considering houses down south are much more expensive.
Richard Donnell, research director at Zoopla, said half of working people can't afford a two or three-bed house in the south of England today.
He added: "Young people are being hit from all fronts. Rents are up and lots will pay more in stamp duty. Currently, 33pc of house sales don't pay any stamp duty at all."
In their manifesto, the Tories promised to extend the £425,000 first-time buyer stamp duty threshold and introduce a new Help-to-Buy equity loan scheme offering up to 20pc towards the cost of a new-build home.
A month before the general election, Labour said it would introduce a "permanent mortgage guarantee scheme" to get more than 80,000 young people on the housing ladder over the next five years.
The scheme, first introduced by the Conservatives in 2021, sees the Government act as a guarantor for home loans where buyers can only afford 5pc deposits – the idea being that lenders can offer bigger loans with more confidence.
But since getting into power, Labour has not published any further details on the one pledge it made to help young people buy a home.
'I fear my toddler will never afford a house'
Graham May, a 34-year-old web developer, has a three-year-old daughter. He managed to get a university education before fees jumped from £3,000 to £9,000, while anyone over the age of 55 received their education for free.
He said: "It does concern me, what my daughter's future will look like and whether she'll ever be able to own a house.
"I don't think it matters who is in charge, there always seems to be a focus on pensioners. It's always a 'old people vote more, so let's give them all the goodies' approach from governments.
"Where is the triple lock for young people? It's all doom and gloom. I'm not surprised there's a falling birth rate. Who can afford a kid these days?"
Mr May felt pushed into university when he was in school, and that there weren't strong enough pathways to being an electrician or a plumber.
" It's so much debt. The job market is a lot worse for university graduates these days, whereas hands-on careers are way more in demand. University isn't a magic bullet."
Liz Emerson, another of Intergenerational Foundation's co-founders, said the Government should "at the very least" lower the student loan repayment threshold from 9pc to 5pc in order to ease the cost-of-living crisis facing younger generations.
She added: "Targeting the young again with higher university fees smacks of intergenerational unfairness while older generations receive an inflation-busting increase in the state pension."
