There are a few different reasons why property ownership is more difficult to achieve for single women – and even more so when mortgage affordability criteria are increasingly stringent because of rising interest rates and a cost of living crisis which stubbornly refuses to ease.
The gender pay gap
The first and principal reason is almost certainly simply because women in the UK earn less on average than men. In April 2022, the Office of National Statistics revealed that the median hourly pay for full-time employees was 8.3% less for women than for men.
And with lower wages than men, women often struggle to meet the affordability criteria laid down by lenders, which generally require a minimum level of income to be accepted for a mortgage.
Furthermore, women are more likely to be employed in lower paid sectors, such as care work and hospitality, which often pay staff the Government minimum wage on contracted hours.
Lack of affordable housing
Another significant barrier faced by women is the general lack of affordable housing in the UK and in England in particular.
According to a report conducted by Heriot-Watt University on behalf of the National Housing Federation and the homelessness charity, Crisis, around 340,000 new homes need to be supplied in England each year, of which 145,000 should be affordable.
According to the Women’s Budget Group’s 2019 Housing Report, women needed over 12 times their annual salaries to be able to buy a home in England, while men needed just over eight times.
London and the South East were the worst affected regions where women needed 18 times and 16 times their annual earnings, respectively. And when it came to buying a house with a typical mortgage, women’s incomes fell over 50% short in most regions.
There was no region in England where private rented housing was affordable on women’s median earnings. (Affordable rent is calculated by a Government formula and defined as rent that is set at up to 80% of market rent.)
Since these reports were written, mortgage rates, rents and house prices have all risen significantly and wages less so. The shortage of affordable housing means that more women live in overcrowded or unsuitable housing with associated effects on health and well-being.
Discrimination in the housing market
Women have also reported that they feel discriminated against in the housing market. A recent study by the National Housing Federation found that women were asked about their marital status or plans to start a family by some property sector professionals. They felt they were perceived as higher risks by lenders and believed it was more arduous for them to secure mortgages or rental properties.
Additionally, women are more likely to be single parents which poses further problems when trying to secure mortgages or finding affordable accommodation for themselves and their children.
Homeless charity, Shelter, says single parents face a higher risk of homelessness, with many struggling to find affordable housing.
And if they happen to be one of the increasing number of self-employed, women, the situation can be worse.
According to the Association of Independent Professionals and Self Employed, mothers account for 594,000 self-employed earners in the UK and some claim to be penalised because lenders assume their income will fall when a new child arrives because of reduced working hours.
Beginning to change
Carl Shave, director at The Mortgage Centre, believes being self-employed offers greater flexibility with many parents working from home and taking minimum days off.
Writing in October last year, he said: “Whilst the self-employed don’t have access to statutory maternity pay, they can only work 10 days in a nine-month period to claim the maternity allowance, which is not a viable option for the majority.
“There also appear to be issues for women on maternity leave from full-time employment, with lenders querying future childcare costs and, thereby, the potential impact of mortgage repayment capability.”
While all of the above gives real cause for concern, there are some signs that things are slowly beginning to change.
According to Moneysupermarket, women made up 43.9% of all mortgage enquiries in 2018, many women are marrying later in life having already established themselves as higher earners and homeowners and more women hold senior positions in the financial services sector.
Given that until 1870 women were unable to earn money in their own right or inherit property (it belonged to their husbands), we have to accept that change occurs gradually.
From 1990 to 2019 the share of households headed by single women as the main breadwinner rose from 17.6% to 22.6%. And among married double-earner households, women household heads rose from 21.8% in 1990 to 46.1% in 2019.
Perhaps these numbers are the early indicators of a changing more equitable UK.