626: Women and Property Investing
Importance of Women: We will switch tact now. What we’d like to do is describe how important women have been in the last 40 years to property prices and property investment. This is for both senior seasoned investors and younger people just starting out – to give some context and insights.
Workplace Participation: Firstly, decades ago in the 1960s and early 1970s, women’s participation rates in the workplace were minimal. Women tended to stay at home and look after the kids – “homemakers” as they describe the role in the USA. Some women had part time jobs to supplement incomes. Very few women went to University (or Polytechnic) – in fact only 5% of men went to University and around 2% of women. In Universities like Cambridge and Oxford, there were many colleges that did not allow women to study until the 1960-1970s. Very few women had professional or managerial jobs. Very few women were engineers or scientists. Most banks would not lend to women in the 1960s and combined incomes – double incomes - were not considered until around 1980s. This without doubt held back women from achieving high earning jobs and contributing in society as whole. Roll on to 2018 and we have 50% of the UK population going to University (that includes the old Polytechnics) and around half the people going to University are women – in fact more women go to university than men now. It is illegal to pay women less than men for the same job in the UK. Women’s participation in the workplace has massively expanded. Many of these jobs are now professional and full-time. There are many more stay at home men now than in the 1970s. Banks all consider two wages when assessing how much can be borrowed against a property.
Because so many households now have two professional or full time wage earners – this means the overall family salary has gone up when considering borrowing for just a single mortgage against a home.
Impact on Property Prices: One of the key insights is that this is one reason why property prices have risen so sharply since the 1960s. Access to mortgage for both men, women and men and women combined has facilitate this. In the 1960s, it was only men that had access to mortgages – and the multiples that could be borrowed was around three times wage income. Now banks consider two incomes combined then multiples of income for borrowing assessments are often five or even 5˝ times income.
Mortgages: Furthermore there are now many single women wanting to acquire properties and also acquiring mortgages. In the 1950s, the population of the UK was around 60 million, with maybe 20 million men of age 18-60 the main group that were buying properties. In 2018 there are 70 million people in the UK with around 45 million “eligible” men and women of age 18-60 years old chasing properties – that’s over double the numbers. Meanwhile the amount of properties being build has dropped dramatically from the 1960s – with may be 135,000 new homes in 2017 but a demand of at least 300,000. This is another reason why property prices have risen so strongly – with supply diminishing and demand through the addition of full time working women and and expanding population – along with easier financing.
Demand Strong: So next time you consider why demand is so strong for property – its partly driven by women. The other aspect is that women on the whole tend to make the decisions when it comes to property purchase. You won’t come across many couples where the man unilaterally decides on a family home property purchase, its normally the women that gives their strong view and then the man falls into line particularly for single family homes. If you are ever selling a property, its most important to convince the women of the household. And they say that women tend to make up their mind as soon as they have seen the hall. First impression definitely count with this regard – you need to make sure any hallway is attractive and also the kitchen and bathroom are very clean and fairly new.
More Women Than Men: As socio-economic trends change – we see more women living on their own particularly in their latter years. Women on average live around 4 years longer than men – and the divorce rate is high in the UK – over 50%. If a couple who have kids get divorced, it’s almost always the woman that stays and the man that leaves the family house. Courts tend to side with the woman because they are on the whole looking after the interests of the kids – the kids come first – and court believe this means securing the mother’s home with the kids first and foremost. So as far as trends are concerned there are more single (or divorced) women living with kids in homes without the man in 2018 compared to 1960. There are also more women than men in the UK – partly because many men were killed in World War II and partly because women live longer – largely because they are less accident prone and tend to take slightly better care of their health. Its interesting also to note that if a man lives with a woman, they live on average four years longer than single men. But if women lives with a man, they do not live longer – they have the same survival rates. This means that its important for men to try and stay with their partners – but less important that women stay with their partner for longevity!
Summary: The message is that women are equally important in property investment as men – they drive markets, drive purchases and drive demand – via property selection and a trend towards more single women property ownership, plus their equal contributions to mortgage financing with the men. And women’s participation in the workplace and equal rights has helped drive property demand over the last 50 years and will continue to do so in future. This needs to be considered for women and men property investors alike.
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